Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions or the treatment of stock options or deferred compensation by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, or payable, distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “Payment”), would be subject to the excise tax imposed by Sections 4999 or 409A of the Code or any successor provisions (collectively, “Section 4999”), or any interest or penalties arc incurred by Executive with respect to each excise tax (such, excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (b) Subject to the provisions of Section 12(c), all determinations required to be made under this Section 12, including 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 determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company said Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. (c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e) shall not impair Executive’s rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring legal representation with respect to such claim which representation shall be paid for by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim, and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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. (d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 6 contracts
Samples: Employment Agreement (Lucid Inc), Employment Agreement (Lucid Inc), Employment Agreement (Lucid Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options distribution by Employer or deferred compensation by the Company or its affiliated companies any affiliates to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 7 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c7(b), all determinations required to be made under this Section 127, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions assumption to be utilized in arriving at such determination, shall be made by the Company’s Employer's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Employer and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the CompanyEmployer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting affecting the Change in of Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the CompanyEmployer. Any Gross-Up Payment, as determined pursuant to this Section 127, shall be paid by the Company Employer to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company Employer and Executive. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company Employer in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyEmployer, or a change in the amount of the payment by the Company Employer, of the Gross-Up PaymentPayment and Employer shall be responsible to make such payment to Employer. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company Employer of the nature of such claim and the date on which such claim is requested required to be paid; provided that the failure to give any notice pursuant to this Section 12(e7(c) shall not impair Executive’s 's rights under this Section 12 7 except to the extent the Company Employer is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive Employee gives such notice to the Company Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company Employer notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company Employer any information reasonably requested by the Company relating to such claim,Employer;
(ii2) take such action in connection with contesting such claim as the Company Employer shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by the Company,an attorney reasonably selected by Employer;
(iii3) cooperate with the Company Employer in good faith in order to effectively to contest such claim, ; and
(iv4) permit the Company Employer to participate in any proceedings relating to such claim; provided, however, that the Company Employer shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax tax-basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c7(c), the Company Employer shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of to such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company Employer shall determine; provided further, that if the Company Employer directs Executive to pay such claim and xxx for a refund, the Company Employer 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s Employer's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company Employer pursuant to Section 12(c7(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s Employer's complying with the requirements of Section 12(c7(c)) promptly pay to the Company Employer 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 Employer pursuant to Section 12(c7(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company Employer does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 3 contracts
Samples: Employment Agreement (Stonepath Group Inc), Employment Agreement (Stonepath Group Inc), Employment Agreement (Stonepath Group Inc)
Tax Indemnity Payments. (a) Anything Notwithstanding anything in this Agreement to the contrary notwithstandingcontrary, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code Code, or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”) "), which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may shall appoint another nationally recognized public accounting firm to make the determinations required hereunder under this Agreement (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunderunder this Agreement). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm, it is possible that Gross-Up Payments that will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made under this Agreement. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a the payment by the CompanyCompany of, or result in a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
: (i) give the Company any information reasonably requested by the Company relating to such claim,
, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
, (iii) cooperate with the Company in good faith in order effectively to contest such claim, and
claim and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c13(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paidrefund.
Appears in 2 contracts
Samples: Employment Agreement (Standard Management Corp), Employment Agreement (Standard Management Corp)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and sue 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 2 contracts
Samples: Employment Agreement (Conseco Inc), Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “"Payment”"), would be constitute "parachute payments" (as such term is defined under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision, and the regulations promulgated thereunder (collectively, "Section 280G")) which exceed three times Executive's "base amount" (as such term is defined under Section 280G) by at least One Hundred Thousand Dollars ($100,000) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”), ") or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”")), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. If the Payments exceed three times the Executive's "base amount," but by an amount of less than One Hundred Thousand Dollars ($100,000), such Payments shall be reduced by the least amount necessary to bring such Payments below three times the Executive's "base amount."
(b) Subject to the provisions of Section 12(c)) hereof, all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred deemed to as be the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s determination's determination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. In the case of an Overpayment, Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment; provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 12(a) hereof to make Executive whole, on an after-tax basis, from the application of Section 4999.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e12(c) shall not impair Executive’s 's rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c)) hereof, the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible permxxxible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall advance the amount axxxnt 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c)) hereof, Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) hereof) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the txx claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall xxxll 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 11 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c11(c), all determinations required to be made under this Section 1211, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1211, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c11(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e11(c) shall not impair Executive’s 's rights under this Section 12 11 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c11(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c11(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c11(c)) 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 Section 12(c11(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.,
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything Notwithstanding anything in this Agreement SERP or any other agreement between the Executive and the Company to the contrary notwithstandingcontrary, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company Company, any purchaser, successor, or assign thereof, or any of its affiliated companies or their affiliates to or for the benefit of an the Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of hereof, the Agreement LTIP or otherwise otherwise, but determined without regard to any additional payments required under this Section 12 5 (each a “Payment”), would be constitute “parachute payments” (as such term is defined under Section 280G of the Internal Revenue Code, as amended (the “Code”) or any successor provision, and the regulations promulgated thereunder (collectively, “Section 280G”)) which exceed three times the Executive’s “base amount” (as such term is defined under Section 280G) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “Section 4999”), ) or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”)), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federalfederal, state or local income and self-employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c)5(c) hereof, all determinations required to be made under this Section 125, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) ), which shall provide detailed supporting calculations both to the Company said and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 125, shall be paid by the Company to the Executive within five (5) business days of the receipt of the Accounting Firm’s determinationdetermination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penaltydetailing its determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company (an “Underpayment”), or that Gross-Up Payments will have been made by the Company which should not have been made (an “Overpayment”), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c5(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment (or, if retained by the Executive, at his own expense to repay such Overpayment); provided, however, that (i) in the event of an Overpayment actually paid to the IRS or other relevant taxing authority, and provided that the Executive uses his best efforts to seek a refund of any such Overpayment, the Executive shall not be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 5(a) hereof to make the Executive whole, on an after-tax basis, from the application of Section 4999.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e5(c) shall not impair the Executive’s rights under this Section 12 5 except to the extent the Company is materially prejudiced thereby. The Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income, self-employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c5(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest 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 further, that if the Company directs the Executive to pay such 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, self-employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) . If, after the receipt by the Executive of an any Overpayment or any amount advanced by the Company pursuant to Section 12(c)5(c) hereof, the Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 12(c)5(c) hereof) 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 Section 12(c5(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty ninety (3090) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Supplemental Executive Retirement Plan Agreement (CSK Auto Corp)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company or its affiliated companies to or for the benefit of Executivethe Director, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “"Payment”"), would be constitute "parachute payments" (as such term is defined under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision, and the regulations promulgated thereunder (collectively, "Section 280G")) which exceed three times the Director's "base amount" (as such term is defined under Section 280G) by at least One Hundred Thousand Dollars ($100,000) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”), ") or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”")), then Executive the Director shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive the Director of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and self-employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive the Director retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c)) hereof, all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Executive and the Director within fifteen (15) business days of the receipt of notice from Executive the Director that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive the Director within five (5) days of the receipt of the Accounting Firm’s determination's determination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by Executivethe Director, it shall furnish Executive the Director with a written opinion that failure to report the Excise Tax on Executive’s the Director's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executivethe Director. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive the Director thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executivethe Director. In the case of an Overpayment, the Director shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment; provided, however, that (i) the Director shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 12(a) hereof to make the Director whole, on an after-tax basis, from the application of Section 4999.
(c) Executive The Director shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive the Director is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e12(c) shall not impair Executive’s the Director's rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive The Director shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive the Director gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive the Director in writing prior to the expiration of such period that it desires to contest such claim, Executive the Director shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive the Director harmless, on an after-tax basis, for any Excise Tax or income, self-employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c)) hereof, the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive the Director to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible manner, and Executive xxe Director agrees to prosecute such contest 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 further, that if the Company directs Executive the Director to pay such claim and xxx sue for a refund, the Company shall advance the amount of such payment paymexx to Executive the Director on an interest-free basis and shall indemnify and hold Executive the Director harmless, on an after-tax basis, from any Excise Tax or income, self-employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive the Director with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive the Director 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.
(d) If, after the receipt by Executive the Director of an amount advanced by the Company pursuant to Section 12(c)) hereof, Executive the Director becomes entitled to receive, and receives, any refund with respect to such claim, Executive the Director shall (subject to the Company’s 's complying with the requirements of Section 12(c)) hereof) 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 the Director of an amount advanced by the Company pursuant to Section 12(c), a determination is made that Executive the Director shall not be entitled to any refund with respect to such claim and the Company does not notify Executive the Director in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Chairman Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of ExecutiveEmployee, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 11 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive Employee with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive Employee shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c11(c), all determinations required to be made under this Section 1211, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Executive and Employee within fifteen (15) business days of the receipt of notice from Executive Employee that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1211, shall be paid by the Company to Executive Employee within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by ExecutiveEmployee, it shall furnish Executive Employee with a written opinion that failure to report the Excise Tax on Executive’s Employee's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and ExecutiveEmployee. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c11(c) and Executive Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of ExecutiveEmployee.
(c) Executive Employee shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e11(c) shall not impair Executive’s Employee's rights under this Section 12 11 except to the extent the Company is materially prejudiced thereby. Executive Employee shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive Employee gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive Employee in writing prior to the expiration of such period that it desires to contest such claim, Executive Employee shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive Employee harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c11(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive Employee to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible manner, and Executive xxx Employee agrees to prosecute such contest 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 further, that if the Company directs Executive Employee to pay such claim and xxx sue for a refund, the Company shall advance the amount of such ox xuch payment to Executive Employee on an interest-free basis and shall indemnify and hold Executive Employee harmless, on an after-tax basis, from any Excise Tax or income, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive Employee 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.
(d) If, after the receipt by Executive Employee of an amount advanced by the Company pursuant to Section 12(c11(c), Executive Employee becomes entitled to receive, and receives, any refund with respect to such claim, Executive Employee shall (subject to the Company’s 's complying with the requirements of Section 12(c11(c)) 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 Employee of an amount advanced by the Company pursuant to Section 12(c11(c), a determination is made that Executive Employee shall not be entitled to any refund with respect to such claim and the Company does not notify Executive Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options distribution by Employer or deferred compensation by the Company or its affiliated companies any affiliates to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 7 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c7(b), all determinations required to be made under this Section 127, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions assumption to be utilized in arriving at such determination, shall be made by the Company’s Employer's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Employer and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the CompanyEmployer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting affecting the Change in of Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e) shall not impair Executive’s rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring legal representation with respect to such claim which representation shall be paid for by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.the
Appears in 1 contract
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c), all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e) shall not impair Executive’s rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claimof, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring legal representation with respect to such claim which representation shall be paid for by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.or
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and sue 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the txx claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall xxxll 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall xxxll 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c), all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a the payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e12(c) shall not impair Executive’s 's rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and sue 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything Notwithstanding anything in this Employment Agreement or any other agreement between the Executive and the Company to the contrary notwithstandingcontrary, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company Company, any purchaser, successor, or assign thereof, or any of its affiliated companies or their affiliates to or for the benefit of the Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of hereof, the Agreement LTIP or otherwise otherwise, but determined without regard to any additional payments required under this Section 12 Article 7 (each a “Payment”), would be constitute “parachute payments” (as such term is defined under Section 280G of the Code or any successor provision, and the regulations promulgated thereunder (collectively, “Section 280G”)) which exceed three times the Executive’s “base amount” (as such term is defined under Section 280G) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “Section 4999”), ) or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”)), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federalfederal, state or local income and self-employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c)Article 7(c) hereof, all determinations required to be made under this Section 12Article 7, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) ), which shall provide detailed supporting calculations both to the Company said and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12Article 7, shall be paid by the Company to the Executive within five (5) business days of the receipt of the Accounting Firm’s determinationdetermination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penaltydetailing its determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company (an “Underpayment”), or that Gross-Up Payments will have been made by the Company which should not have been made (an “Overpayment”), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(cArticle 7(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment (or, if retained by the Executive, at his own expense to repay such Overpayment); provided, however, that (i) in the event of an Overpayment actually paid to the IRS or other relevant taxing authority, and provided that the Executive uses his best efforts to seek a refund of any such Overpayment, the Executive shall not be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Article 7(a) hereof to make the Executive whole, on an after-tax basis, from the application of Section 4999.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(eArticle 7(c) shall not impair the Executive’s rights under this Section 12 Article 7 except to the extent the Company is materially prejudiced thereby. The Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (CSK Auto Corp)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 11 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “Section ASection 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c11(c), all determinations required to be made under this Section 1211, including whether and when a Gross Gross- Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1211, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c11(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e11(c) shall not impair Executive’s 's rights under this Section 12 11 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection connectio with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c11(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible permissixxx manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall advance the amount of amounx xf 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c11(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c11(c)) 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 Section 12(c11(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, Executive paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise (but determined without regard to any additional payments required under this Section 12 (13, a “"Payment”), ") would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that adjustments may be determined at any time of Gross-Up Payments which should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim xxaim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall sxxxl 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c), all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the 10 Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a the payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e12(c) shall not impair Executive’s 's rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the txx claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall xxxll 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, Executive paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise (but determined without regard to any additional payments required under this Section 12 (13, a “"Payment”), ") would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that adjustments may be determined at any time of Gross-Up Payments which should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible manner, and Executive anx Xxecutive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall advance the amount of such payment to xx Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and,
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and sue 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, Executive paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise (but determined without regard to any additional payments required under this Section 12 (13, a “"Payment”), ") would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that adjustments may be determined at any time of Gross-Up Payments which should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of ExecutiveEmployee, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 11 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive Employee with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive Employee shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c11(c), all determinations required to be made under this Section 1211, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Executive and Employee within fifteen (15) business days of the receipt of notice from Executive Employee that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1211, shall be paid by the Company to Executive Employee within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by ExecutiveEmployee, it shall furnish Executive Employee with a written opinion that failure to report the Excise Tax on Executive’s Employee's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and ExecutiveEmployee. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c11(c) and Executive Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of ExecutiveEmployee.
(c) Executive Employee shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e11(c) shall not impair Executive’s Employee's rights under this Section 12 11 except to the extent the Company is materially prejudiced thereby. Executive Employee shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive Employee gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive Employee in writing prior to the expiration of such period that it desires to contest such claim, Executive Employee shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive Employee harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c11(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive Employee to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible manner, and Executive axx Employee agrees to prosecute such contest 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 further, that if the Company directs Executive Employee to pay such claim and xxx sue for a refund, the Company shall advance the amount of such payment payxxxt to Executive Employee on an interest-free basis and shall indemnify and hold Executive Employee harmless, on an after-tax basis, from any Excise Tax or income, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive Employee 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.
(d) If, after the receipt by Executive Employee of an amount advanced by the Company pursuant to Section 12(c11(c), Executive Employee becomes entitled to receive, and receives, any refund with respect to such claim, Executive Employee shall (subject to the Company’s 's complying with the requirements of Section 12(c11(c)) 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 Employee of an amount advanced by the Company pursuant to Section 12(c11(c), a determination is made that Executive Employee shall not be entitled to any refund with respect to such claim and the Company does not notify Executive Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 11 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c11(c), all determinations required to be made under this Section 1211, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1211, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c11(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e11(c) shall not impair Executive’s 's rights under this Section 12 11 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c11(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim xxaim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall sxxxl 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c11(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c11(c)) 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 Section 12(c11(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything Notwithstanding anything in this Severance Agreement or any other agreement between the Executive and the Company to the contrary notwithstandingcontrary, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company Company, any purchaser, successor, or assign thereof, or any of its affiliated companies or their affiliates to or for the benefit of the Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of hereof, the Agreement LTIP or otherwise otherwise, but determined without regard to any additional payments required under this Section 12 6 (each a “Payment”), would be constitute “parachute payments” (as such term is defined under Section 280G of the Code or any successor provision, and the regulations promulgated thereunder (collectively, “Section 280G”)) which exceed three times the Executive’s “base amount” (as such term is defined under Section 280G) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “Section 4999”), ) or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”)), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federalfederal, state or local income and self-employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c)6(c) hereof, all determinations required to be made under this Section 126, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) ), which shall provide detailed supporting calculations both to the Company said and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 126, shall be paid by the Company to the Executive within five (5) business days of the receipt of the Accounting Firm’s determinationdetermination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penaltydetailing its determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company (an “Underpayment”), or that Gross-Up Payments will have been made by the Company which should not have been made (an “Overpayment”), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c6(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment (or, if retained by the Executive, at his own expense to repay such Overpayment); provided, however, that (i) in the event of an Overpayment actually paid to the IRS or other relevant taxing authority, and provided that the Executive uses his best efforts to seek a refund of any such Overpayment, the Executive shall not be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 6(a) hereof to make the Executive whole, on an after-tax basis, from the application of Section 4999.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e6(c) shall not impair the Executive’s rights under this Section 12 6 except to the extent the Company is materially prejudiced thereby. The Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “"Payment”"), would be constitute "parachute payments" (as such term is defined under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision, and the regulations promulgated thereunder (collectively, "Section 280G")) which exceed three times Executive's "base amount" (as such term is defined under Section 280G) by at least One Hundred Thousand Dollars ($100,000) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”), ") or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”")), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c)) hereof, all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred deemed to as be the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s determination's determination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. In the case of an Overpayment, Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment; provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 12(a) hereof to make Executive whole, on an after-tax basis, from the application of Section 4999.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e12(c) shall not impair Executive’s 's rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c)) hereof, the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible mannermxxxer, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall advance the amount of such xxxh 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c)) hereof, Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) hereof) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and,
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options distribution by Employer or deferred compensation by the Company or its affiliated companies any affiliates to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 7 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c), all All determinations required to be made under this Section 127, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions assumption to be utilized in arriving at such determination, shall be made by the Company’s Employer's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Employer and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the CompanyEmployer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting affecting the Change in of Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the CompanyEmployer. Any Gross-Up Payment, as determined pursuant to this Section 127, shall be paid by the Company Employer to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company Employer and Executive. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company Employer in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyEmployer, or a change in the amount of the payment by the Company Employer, of the Gross-Up PaymentPayment and Employer shall be responsible to make such payment to Executive. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company Employer of the nature of such claim and the date on which such claim is requested required to be paid; provided that the failure to give any notice pursuant to this Section 12(e7(c) shall not impair Executive’s 's rights under this Section 12 7 except to the extent the Company Employer is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company Employer notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company Employer any information reasonably requested by the Company relating to such claim,Employer;
(ii2) take such action in connection with contesting such claim as the Company Employer shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by the Company,an attorney reasonably selected by Employer;
(iii3) cooperate with the Company Employer in good faith in order to effectively to contest such claim, ; and
(iv4) permit the Company Employer to participate in any proceedings relating to such claim; provided, however, that the Company Employer shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax tax-basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c7(c), the Company Employer shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of to such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company Employer shall determine; provided further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided furtherprovided, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s Employer's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, Executive paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise (but determined without regard to any additional payments required under this Section 12 (13, a “"Payment”), ") would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that adjustments may be determined at any time of Gross-Up Payments which should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the txx claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall xhall 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything Notwithstanding anything in this Severance Agreement or any other agreement between the Executive and the Company to the contrary notwithstandingcontrary, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company Company, any purchaser, successor, or assign thereof, or any of its affiliated companies or their affiliates to or for the benefit of the Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of hereof, the Agreement LTIP or otherwise otherwise, but determined without regard to any additional payments required under this Section 12 6 (each a “Payment”), would be constitute “parachute payments” (as such term is defined under Section 280G of the Code or any successor provision, and the regulations promulgated thereunder (collectively, “Section 280G”)) subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “Section 4999”), ) or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”)), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federalfederal, state or local income and self-employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c)6(c) hereof, all determinations required to be made under this Section 126, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) ), which shall provide detailed supporting calculations both to the Company said and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 126, shall be paid by the Company to the Executive within five (5) business days of the receipt of the Accounting Firm’s determinationdetermination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penaltydetailing its determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company (an “Underpayment”), or that Gross-Up Payments will have been made by the Company which should not have been made (an “Overpayment”), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c6(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment (or, if retained by the Executive, at his own expense to repay such Overpayment); provided, however, that (i) in the event of an Overpayment actually paid to the IRS or other relevant taxing authority, and provided that the Executive uses his best efforts to seek a refund of any such Overpayment, the Executive shall not be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 6(a) hereof to make the Executive whole, on an after-tax basis, from the application of Section 4999.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e6(c) shall not impair the Executive’s rights under this Section 12 6 except to the extent the Company is materially prejudiced thereby. The Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income, self-employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c6(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and xxx sxx for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest 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 further, that if the Company directs the Executive to pay such claim and xxx sxx 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, self-employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) . If, after the receipt by the Executive of an any Overpayment or any amount advanced by the Company pursuant to Section 12(c)6(c) hereof, the Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 12(c)6(c) hereof) 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 Section 12(c6(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty ninety (3090) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, Executive paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise (but determined without regard to any additional payments required under this Section 12 (12, a “"Payment”), ") would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c), all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e) shall not impair Executive’s rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring legal representation with respect to such claim which representation shall be paid for by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as As a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), uncertainty in the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.application of
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; , provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the txx claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall xxxll 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything Notwithstanding anything in this Severance Agreement or any other agreement between the Executive and the Company to the contrary notwithstandingcontrary, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company Company, any purchaser, successor, or assign thereof, or any of its affiliated companies or their affiliates to or for the benefit of the Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of hereof, the Agreement LTIP or otherwise otherwise, but determined without regard to any additional payments required under this Section 12 6 (each a “Payment”), would be constitute “parachute payments” (as such term is defined under Section 280G of the Code or any successor provision, and the regulations promulgated thereunder (collectively, “Section 280G”)) subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “Section 4999”), ) or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”)), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federalfederal, state or local income and self-employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c)6(c) hereof, all determinations required to be made under this Section 126, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) ), which shall provide detailed supporting calculations both to the Company said and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 126, shall be paid by the Company to the Executive within five (5) business days of the receipt of the Accounting Firm’s determinationdetermination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penaltydetailing its determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company (an “Underpayment”), or that Gross-Up Payments will have been made by the Company which should not have been made (an “Overpayment”), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c6(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e) shall not impair Executive’s rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring legal representation with respect to such claim which representation shall be paid for by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance or with respect to any imputed income with respect to such advance., and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.the
Appears in 1 contract
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “12(a) "Payment”"), would be constitute "parachute payments" (as such term is defined under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision, and the regulations promulgated thereunder (collectively, "Section 280G")) which exceed three times Executive's "base amount" (as such term is defined under Section 280G) by at least One Hundred Thousand Dollars ($100,000) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”), ") or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”")), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. If the Payments exceed three times the Executive's "base amount," but by an amount of less than One Hundred Thousand Dollars ($100,000), such Payments shall be reduced by the least amount necessary to bring such Payments below three times the Executive's "base amount".
(b) Subject to the provisions of Section 12(c)) hereof, all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred deemed to as be the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s determination's determination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. In the case of an Overpayment, Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment; provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 12(a) hereof to make Executive whole, on an after-tax basis, from the application of Section 4999.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e12(c) shall not impair Executive’s 's rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c)) hereof, the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible mannermanxxx, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and xxx sue for a refund, the Company shall advance the amount of such suxx 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c)) hereof, Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) hereof) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that at least $100,000 in payments, the aggregate payments or distributions or the treatment of stock options or deferred compensation by the Company or its affiliated companies to or for the benefit of the Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 11 (a “"Payment”"), would be constitute "parachute payments" (as such term is defined under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision, and the regulations promulgated thereunder (collectively, "Section 280G")) which exceed three times the Executive's "base amount" (as such term is defined under Section 280G) by at least One Hundred Thousand Dollars ($100,000) and are therefore subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”), ") or any interest or penalties arc incurred by Executive with respect to each such excise tax (such, the total excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”")), then the Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an the amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and self-employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Excite Tax imposed upon the Payments. If the Payments exceed three times the Executive's "base amount," but by an amount of less than One Hundred Thousand Dollars ($100,000), such Payments shall be reduced by the least amount necessary to bring such Payments below three times the Executive's "base amount."
(b) Subject to the provisions of Section 12(c)11(c) hereof, all determinations required to be made under this Section 1211, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. shall than be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1211, shall be paid by the Company to the Executive within five (5) business days of the receipt of the Accounting Firm’s determination's determination (it being understood, however, that the Gross Up Payment may, if permitted by law, be paid directly to the applicable taxing authorities). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the event that the Company exhausts its remedies pursuant to Section 12(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and an any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), and otherwise reasonably cooperate with the Company to correct such Overpayment; provided, however, that (i) the Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Section 11(a) hereof to make the Executive whole, on an after-tax basis, from the application of Section 4999.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e11(c) shall not impair the Executive’s 's rights under this Section 12 11 except to the extent the Company is materially prejudiced thereby. The Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income, self-employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c)11(c) hereof, the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible manner, and xxe Executive agrees to prosecute such contest 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 further, that if the Company directs the Executive to pay such claim and xxx sue for a refund, the Company shall advance the amount of such payment paymexx 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, self-employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 12(c)11(c) hereof, the Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)11(c) hereof) 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 Section 12(c11(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of ExecutiveEmployee, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 11 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive Employee with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive Employee shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c11(c), all determinations required to be made under this Section 1211, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Executive and Employee within fifteen (15) business days of the receipt of notice from Executive Employee that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1211, shall be paid by the Company to Executive Employee within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by ExecutiveEmployee, it shall furnish Executive Employee with a written opinion that failure to report the Excise Tax on Executive’s Employee's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and ExecutiveEmployee. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c11(c) and Executive Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of ExecutiveEmployee.
(c) Executive Employee shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e11(c) shall not impair Executive’s Employee's rights under this Section 12 11 except to the extent the Company is materially prejudiced thereby. Executive Employee shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive Employee gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive Employee in writing prior to the expiration of such period that it desires to contest such claim, Executive Employee shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive Employee harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c11(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive Employee to pay the tax claimed and xxx sue for a refund or contest the claim in any permissible mannerpermissiblx xanner, and Executive Employee agrees to prosecute such contest 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 further, that if the Company directs Executive Employee to pay such claim and xxx sue for a refund, the Company shall advance the amount of xx such payment to Executive Employee on an interest-free basis and shall indemnify and hold Executive Employee harmless, on an after-tax basis, from any Excise Tax or income, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive Employee 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.
(d) If, after the receipt by Executive Employee of an amount advanced by the Company pursuant to Section 12(c11(c), Executive Employee becomes entitled to receive, and receives, any refund with respect to such claim, Executive Employee shall (subject to the Company’s 's complying with the requirements of Section 12(c11(c)) 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 Employee of an amount advanced by the Company pursuant to Section 12(c11(c), a determination is made that Executive Employee shall not be entitled to any refund with respect to such claim and the Company does not notify Executive Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code Code, or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and the Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c), all determinations required to be made under this Section 12, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the Company, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e12(c) shall not impair Executive’s 's rights under this Section 12 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; , provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and sue 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options distribution by Employer or deferred compensation by the Company or its affiliated companies any affiliates to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 7 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Code or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c7(b), all determinations required to be made under this Section 127, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions assumption to be utilized in arriving at such determination, shall be made by the Company’s Employer's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said Employer and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the CompanyEmployer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting affecting the Change in of Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the CompanyEmployer. Any Gross-Up Payment, as determined pursuant to this Section 127, shall be paid by the Company Employer to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company Employer and Executive. In the event that the Company exhausts its remedies pursuant to Section 12(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company Employer in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyEmployer, or a change in the amount of the payment by the Company Employer, of the Gross-Up PaymentPayment and Employer shall be responsible to make such payment to Employer. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company Employer of the nature of such claim and the date on which such claim is requested required to be paid; provided that the failure to give any notice pursuant to this Section 12(e7(c) shall not impair Executive’s 's rights under this Section 12 7 except to the extent the Company Employer is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive Employee gives such notice to the Company Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company Employer notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i1) give the Company Employer any information reasonably requested by the Company relating to such claim,Employer;
(ii2) take such action in connection with contesting such claim as the Company Employer shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by the Company,an attorney reasonably selected by Employer;
(iii3) cooperate with the Company Employer in good faith in order to effectively to contest such claim, ; and
(iv4) permit the Company Employer to participate in any proceedings relating to such claim; provided, however, that the Company Employer shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax tax-basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c7(c), the Company Employer shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of to such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx sxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company Employer shall determine; provided further, that if the Company Employer directs Executive to pay such claim and xxx sxx for a refund, the Company Employer 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s Employer's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company Employer pursuant to Section 12(c7(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s Employer's complying with the requirements of Section 12(c7(c)) promptly pay to the Company Employer 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 Employer pursuant to Section 12(c7(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company Employer does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Tax Indemnity Payments. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that at least $100,000 in payments, distributions any payment or the treatment of stock options or deferred compensation distribution by the Company or its affiliated companies to or for the benefit of Executive, whether, paid, whether paid or payable, payable or distributed or distributable or vested or to become vested pursuant to the terms of the Agreement or otherwise but determined without regard to any additional payments required under this Section 12 13 (a “"Payment”"), would be subject to the excise tax imposed by Sections Section 4999 or 409A of the Internal Revenue Code of 1986 (as amended the "Code"), or any successor provisions provision (collectively, “"Section 4999”"), or any interest or penalties arc are incurred by Executive with respect to each such excise tax (such, such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), then Executive shall be entitled to receive an additional payment (a “"Gross-Up Payment”") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any Federal, state or local income and employment taxes and Excise Tax (and any interest and penalties imposed with respect to any such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c13(c), all determinations required to be made under this Section 1213, including whether and when a Gross Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s 's public accounting firm (the “"Accounting Firm”") which shall provide detailed supporting calculations both to the Company said and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm. firm shall than then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall he be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 1213, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s 's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s 's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made by the Company ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 12(c13(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that that, if successful, would require a payment by the CompanyCompany of, or a change in the amount of the payment by the Company of of, the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid; provided that the failure to give any notice pursuant to this Section 12(e13(c) shall not impair Executive’s 's rights under this Section 12 13 except to the extent the Company is materially prejudiced thereby. Executive shall not pay such claim prior to the expiration of the 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 payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to to\ contest such claim, Executive shall:
(i1) give the Company any information reasonably requested by the Company relating to such claim,
(ii2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, hiring accepting legal representation with respect to such claim which representation shall be paid for by an attorney reasonably selected by the Company,
(iii3) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income, employment or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of on the foregoing provisions of this Section 12(c13(c), the Company shall control all proceedings taken in connection with such contest so long as the same do and will not leave Executive at risk of exposure for tax liability which is not to be paid by the Company and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue xxx for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest 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 further, that if the Company directs Executive to pay such claim and sue 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, employment or other tax (including interest or penalties with respect to any such taxes) imposed with respect to such Advance advance or with respect to any imputed income with respect to such advance., ; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 12(c13(c), Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s 's complying with the requirements of Section 12(c)) 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 Section 12(c13(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Conseco Inc)
