EXHIBIT 10.6
XXXXXX HALF INTERNATIONAL INC.
EXCISE TAX RESTORATION AGREEMENT
(EFFECTIVE NOVEMBER 5, 1996)
In consideration of the willingness of the individual executives and
directors of Xxxxxx Half International Inc. (the "Company") who are listed in
Attachment A to continue to serve the Company until a change of control of the
Company, the Company agrees to pay to each of such individuals (the "Employees")
the following amount:
(a) EXCISE TAX RESTORATION PAYMENT. In the event that it is determined
that any payment or distribution of any type to or for the benefit of the
Employee made by the Company, by any of its affiliates, by any person who
acquires ownership or effective control of the Company or ownership of a
substantial portion of the Company's assets (within the meaning of section 280G
of the Internal Revenue Code of 1986, as amended, and the regulations thereunder
(the "Code")) or by any affiliate of such person, whether paid or payable or
distributed or distributable pursuant to the terms of an employment agreement or
otherwise (the "Total Payments"), would be subject to the excise tax imposed by
section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest or penalties, are
collectively referred to as the "Excise Tax"), then the Employee shall be
entitled to receive an additional payment (an "Excise Tax Restoration Payment")
in an amount that shall fund the payment by the Employee of any Excise Tax on
the Total Payments as well as all income taxes imposed on the Excise Tax
Restoration Payment, any Excise Tax imposed on the Excise Tax Restoration
Payment and any interest or penalties imposed with respect to taxes on the
Excise Tax Restoration Payment or any Excise Tax.
(b) DETERMINATION BY AUDITORS. All mathematical determinations and all
determinations of whether any of the Total Payments are "parachute payments"
(within the meaning of section 280G of the Code) that are required to be made
under this agreement, including all determinations of whether an Excise Tax
Restoration Payment is required, of the amount of such Excise Tax Restoration
Payment and of amounts relevant to the last sentence of this agreement, shall be
made by the independent auditors retained by the Company most recently prior to
the change in control (the "Auditors"), who shall provide their determination
(the "Determination"), together with detailed supporting calculations regarding
the amount of any Excise Tax Restoration Payment and any other relevant matters,
both to the Company and to the Employee within seven business days of the
Employee's termination date, if applicable, or such earlier time as is requested
by the Company or the Employee (if the Employee reasonably believes that any of
the Total Payments may be subject to the Excise Tax). If the Auditors determine
that no Excise Tax is payable by the Employee, it shall furnish the Employee
with a written statement that such Auditors have concluded that no Excise Tax is
payable (including the reasons therefor) and that the Employee has substantial
authority not to report any Excise Tax on the Employee's federal income tax
return. If an Excise Tax Restoration Payment is determined payable, it shall be
paid to the Employee within five business days after the Determination is
delivered to the Company or the Employee. Any determination by the Auditors
shall be binding upon the Company and the Employee, absent manifest error.
(c) UNDERPAYMENTS AND OVERPAYMENTS. As a result of uncertainty in the
application of section 4999 of the Code at the time of initial determination by
the Auditors hereunder, it is possible that Excise Tax Restoration Payments not
made by the Company should have been made ("Underpayments") or that Excise Tax
Restoration Payments will have been made by the Company which should not have
been made ("Overpayments"). In either event, the Auditors shall determine the
amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment shall promptly be paid by the
Company to or for the benefit of the Employee. In the case of an Overpayment,
the Employee shall, at the direction and expense of the Company, take such steps
as are reasonably
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necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Company and
otherwise reasonably cooperate with the Company to correct such Overpayment;
PROVIDED, HOWEVER, that (i) the Employee shall in no event be obligated to
return to the Company an amount greater than the net after-tax portion of the
Overpayment that the Employee 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 this agreement, which is to make the
Employee whole, on an after-tax basis, for the application of the Excise Tax, it
being understood that the correction of an Overpayment may result in the
Employee's repaying to the Company an amount which is less than the Overpayment.
(d) This agreement amends and supersedes provisions concerning parachute
payments under section 280G of the Code and excise taxes under section 4999 of
the Code in any other employment agreements or other agreements between the
Employee and the Company.
This agreement is adopted this 5th day of November 1996.
XXXXXX HALF INTERNATIONAL INC.
By: /s/ M. XXXXX XXXXXXX
-----------------------------------------
M. Xxxxx Xxxxxxx
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
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EXCISE TAX RESTORATION AGREEMENT
ATTACHMENT A
INDIVIDUALS COVERED BY THIS AGREEMENT
NOVEMBER 5, 1996
Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx X. Xxxxxxx, Xx.
Xxxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxx
J. Xxxxxxx Xxxxxx
M. Xxxxx Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxx Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
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