Common use of Termination of S Corporation Status Clause in Contracts

Termination of S Corporation Status. The Company's status as an S corporation under Section 1362 of the Internal Revenue Code of 1986, as amended (the "Code"), will be terminated as of the earlier of (i) the date of the closing of the Public Offering or (ii) the date specified in a revocation of S corporation status duly filed by the Company (such date being referred to hereinafter as the "Termination Date"). The Company's status as an S corporation under pertinent state tax laws will also be terminated on the Termination Date. The Company shall use the pro rata allocation method prescribed in Section 1362(e)(2) of the Code in order to allocate its taxable income between the short S corporation taxable year ending the day prior to the Termination Date and the C corporation short taxable year commencing on the Termination Date; provided that, if the Company has revoked its S corporation status prior to the date of the Public Offering, it shall use the "closing-of-the-books" method prescribed in Section 1362(e)(3) of the Code.