Common use of Tax Reimbursement Provisions Clause in Contracts

Tax Reimbursement Provisions. (i) If, as the result of any of the compensation payments due hereunder or pursuant to any other agreement between the Company and the Employee, the Employee is required to pay an additional tax pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), (the “Additional Tax”), the Company shall pay the Employee an amount (the “409A Gross-Up Payment”) sufficient such that the net after tax amount of such 409A Gross-Up Payment after payment of all Federal, state and local taxes and any other additional taxes due on such 409A Gross-Up Payment is equal to the full amount of the original Additional Tax imposed under Section 409A. (ii) In the event that the Employee becomes entitled to a payment or benefit as a result of the transactions contemplated by that certain Agreement and Plan of Merger by and among Collect Holdings, Inc., Collect Acquisition Corp., and the Company dated July 21, 2006, and/or any subsequent Company transaction, pursuant to any agreement or arrangement with or plan of the Company or Collect Holdings, Inc. (in the aggregate, the “Total Payments”), if any of the Total Payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the Company shall pay to the Employee in cash an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Employee after deduction of any Excise Tax upon the Total Payments and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment provided for by this Section 4(f)(ii) shall be equal to the Total Payments, provided that, the Employee shall work with the Company, in good faith, to minimize the applicability of Section 280G to the Total Payments in a manner that would be financially neutral to the Employee in the Employee’s sole judgment. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to pay Federal income taxes at the highest marginal rate of taxation in the state and locality of the Employee’s residence on the effective date of a Company transaction entitling the Employee to payments or benefits subject to the Excise Tax, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. All determinations required to be made under this Section 4(f)(ii) shall be made by a nationally recognized accounting firm (the “Accounting Firm”) mutually acceptable to the parties, which shall provide detailed supporting calculations both to the Company and the Employee. Any such determination by the Accounting Firm shall be binding upon the Company and the Employee; provided that in the event the Accounting Firm’s determination is challenged by the Internal Revenue Service or any other taxing authority, the Company shall fully indemnify the Employee for all costs and fees incurred in such proceeding or associated with such challenge. If it is determined that the Gross-Up Payment is different than the Gross-Up Payment determined hereunder (the “Adjusted Gross-Up Payment”), the Company shall immediately pay the Employee the excess of the Adjusted Gross-Up Payment over the Gross-Up Payment or the Employee shall promptly and diligently pursue a refund of the excess of the Gross-Up Payment over the Adjusted Gross-Up Payment and immediately upon receipt of any such refund shall pay the amount refunded, including any interest paid thereon, to the Company.

Tax Reimbursement Provisions. (i) If, as the result of any of the compensation payments due hereunder hereunder, or pursuant to any other agreement between the Company and the EmployeeExecutive, the Employee Executive is required to pay an additional tax pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), (the “Additional Tax”), the Company shall pay the Employee Executive an amount (the “409A Gross-Up Payment”) sufficient such that the net after tax amount of such 409A Gross-Up Payment after payment of all Federal, state and local taxes and any other additional taxes due on such 409A Gross-Up Payment is equal to the full amount of the original Additional Tax imposed under Section 409A. (ii) In the event that the Employee Executive becomes entitled to a payment or benefit as a result of the transactions contemplated by that certain Agreement and Plan of the Merger by and among Collect Holdings, Inc., Collect Acquisition Corp., and the Company dated July 21, 2006Agreement, and/or under any subsequent Company transaction, pursuant to any agreement or arrangement with or plan of the Company or Collect Holdings, Inc. (in the aggregate, the “Total Payments”), if any of the Total Payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the Company shall pay to the Employee Executive in cash an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Employee Executive after deduction of any Excise Tax upon the Total Payments and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment provided for by this Section 4(f)(ii4(d)(ii) shall be equal to the Total Payments, provided that, the Employee Executive shall waive up to $50,000 of the Total Payments if requested by the Company and such waiver results in the complete avoidance of the Excise Tax and shall work with the Company, in good faith, to minimize the applicability of Section 280G to the Total Payments in a manner that would be financially neutral to the Employee Executive in the EmployeeExecutive’s sole judgment. For purposes of determining the amount of the Gross-Up Payment, the Employee Executive shall be deemed to pay Federal income taxes at the highest marginal rate of taxation in the state and locality of the EmployeeExecutive’s residence on the effective date of a Company transaction entitling the Employee Executive to payments or benefits subject to the Excise Tax, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. All determinations required to be made under this Section 4(f)(ii4(d)(ii) shall be made by a nationally recognized accounting firm (the “Accounting Firm”) mutually acceptable to the parties, which shall provide detailed supporting calculations both to the Company and the EmployeeExecutive. Any such determination by the Accounting Firm shall be binding upon the Company and the EmployeeExecutive; provided that in the event the Accounting Firm’s determination is challenged by the Internal Revenue Service or any other taxing authority, the Company shall fully indemnify the Employee Executive for all costs and fees incurred in such proceeding or associated with such challenge. If it is determined that the Gross-Up Payment is different than the Gross-Up Payment determined hereunder (the “Adjusted Gross-Up Payment”), the Company shall immediately pay the Employee Executive the excess of the Adjusted Gross-Up Payment over the Gross-Up Payment or the Employee Executive shall promptly and diligently pursue a refund of the excess of the Gross-Up Payment over the Adjusted Gross-Up Payment and immediately upon receipt of any such refund shall pay the amount refunded, including any interest paid thereon, to the Company.