Common use of Certain Excise Taxes Clause in Contracts

Certain Excise Taxes. In the event that any payment that is either received by you or paid by the Company on your behalf or any property, or any other benefit provided to you under this letter agreement or under any other plan, arrangement or agreement with the Company or any other person whose payments or benefits are treated as contingent on a change of ownership or control of the Company (or in the ownership of a substantial portion of the assets of the Company) or any person affiliated with the Company or such person (but only if such payment or other benefit is in connection with your employment by or other services to the Company) (collectively the “Company Payments”) will be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (and any similar tax that may hereafter be imposed by any taxing authority), then you will be entitled to receive either (i) the full amount of the Company Payments or (ii) a portion of the Company Payments having a value equal to $1 less than three (3) times your “base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of clauses (i) and (ii), after taking into account applicable federal, state, and local income taxes and the Excise Tax, results in the receipt by you on an after-tax basis, of the greatest portion of the Company Payments. Any determination required under this paragraph shall be made in writing by the independent public accountant of the Company (the “Accountants”), whose determination shall be conclusive and binding for all purposes upon the Company and you. For purposes of making any calculation required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code. If there is a reduction of the Company Payments pursuant to this paragraph, such reduction shall occur in the following order: (A) any cash severance payable by reference to your Base Salary or Annual Bonus, (B) any other cash amount payable to you, (C) any employee benefit valued as a “parachute payment,” and (D) acceleration of vesting of any outstanding equity award. In no event whatsoever shall you be entitled to a tax gross-up or other payment in respect of any excise tax, interest or penalties that may be imposed on the Company Payments by reason of the application of Section 280G or Section 4999 of the Code.

Certain Excise Taxes. In the event that any payment that is either received by you or paid by the Company on your behalf or any property, or any other benefit provided to you under this letter agreement or under any other plan, arrangement or agreement with the Company or any other person whose payments or benefits are treated as contingent on of a change of ownership or control of the Company (or Corporation during the Executive’s term of employment, anything in this Agreement to the contrary notwithstanding, in the ownership of a substantial portion event it shall be determined that any payment, benefit or distribution by, to or for the benefit of the assets of Executive, whether made under this Agreement, the Company) Offer Letter or any person affiliated with the Company or such person otherwise (but only if such payment or other benefit is in connection with your employment by or other services to the Company) (collectively the a “Company PaymentsPayment”) will would be subject to the excise tax imposed by Code Section 4999 or any like or successor section thereto (the “Excise Tax”) imposed by Section 4999 of and if the Code net-after tax amount (and any similar tax that may hereafter be imposed by any taxing authority), then you will be entitled to receive either (i) the full amount of the Company Payments or (ii) a portion of the Company Payments having a value equal to $1 less than three (3) times your “base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of clauses (i) and (ii), after taking into account all applicable federaltaxes payable by the Executive, state, and local income taxes and including any Excise Tax) that the Executive would receive with respect to such Payments does not exceed the net-after tax amount the Executive would receive if the amount of such Payments was reduced to the maximum amount which could otherwise be payable to the Executive without the imposition of the Excise Tax, results then, to the extent necessary to eliminate the imposition of the Excise Tax, such Payments shall be reduced in the receipt following order, (i) first, any future cash Payments (if any) shall be reduced (if necessary, to zero); (ii) second, any current cash Payments shall be reduced (if necessary, to zero); (ii) third, all non-cash Payments (other than equity or equity derivative related payments) shall be reduced (if necessary, to zero); and (iv) fourth, all equity or equity derivative payments shall be reduced. The Executive and the Corporation hereby agree that the calculation of any reduction in payments contemplated by you on an after-this Section 7 and any tax basis, of the greatest portion of the Company Payments. Any determination required under this paragraph withholding due in connection with any Excise Tax shall be made by Golden Parachute Tax Solutions LLC (or another nationally recognized certified public accounting or professional firm that is recognized as an expert in writing determinations and calculations for purposes of Section 280G of the Code, selected by the independent public accountant of Corporation and consented to by the Company Executive, such consent not to be unreasonably withheld or delayed) (the “AccountantsCalculating Firm”), whose ) and the determination of any such reduction in payments or Excise Tax withholding shall be conclusive and binding for all purposes upon on the Company Executive absent manifest error. All fees and youexpenses of the Calculating Firm shall be borne solely by the Corporation. For purposes of making Prior to any calculation required reduction in payments contemplated by this paragraphSection 7, the Accountants may make reasonable assumptions Corporation shall provide the Executive with a report setting forth its calculations and approximations concerning applicable taxes and may rely on reasonablethe amount of such reduction, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code. If there is a reduction of the Company Payments pursuant to this paragraph, such reduction shall occur in the following order: (A) any cash severance payable by reference to your Base Salary or Annual Bonus, (B) any other cash amount payable to you, (C) any employee benefit valued as a “parachute payment,” and (D) acceleration of vesting of any outstanding equity award. In no event whatsoever shall you be entitled to a tax gross-up or other payment in respect of any excise tax, interest or penalties that may be imposed on the Company Payments by reason of the application of Section 280G or Section 4999 of the Codealong with adequate supporting information.

Certain Excise Taxes. In the event that any payment that is either received by you or paid by the Company on your behalf or any property, or any other benefit provided to you under this letter agreement or under any other plan, arrangement or agreement with the Company or any other person whose payments or benefits are treated as contingent on a change of ownership or control of the Company (or in the ownership of a substantial portion of the assets of the Company) or any person affiliated with the Company or such person (but only if such payment or other benefit is in connection with your employment by or other services to the Company) (collectively the “Company Payments”) will be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (and any similar tax that may hereafter be imposed by any taxing authority), then you will be entitled to receive either (i) the full amount of the Company Payments or (ii) a portion of the Company Payments having a value equal to $1 less than three (3) times your “base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of clauses (i) and (ii), after taking into account applicable federal, state, and local income taxes and the Excise Tax, results in the receipt by you on an after-after- tax basis, of the greatest portion of the Company Payments. Any determination required under this paragraph shall be made in writing by the independent public accountant of the Company (the “Accountants”), whose determination shall be conclusive and binding for all purposes upon the Company and you. For purposes of making any calculation required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code. If there is a reduction of the Company Payments pursuant to this paragraph, such reduction shall occur in the following order: (A) any cash severance payable by reference to your Base Salary or Annual Bonus, (B) any other cash amount payable to you, (C) any employee benefit valued as a “parachute payment,” and (D) acceleration of vesting of any outstanding equity award. In no event whatsoever shall you be entitled to a tax gross-up or other payment in respect of any excise tax, interest or penalties that may be imposed on the Company Payments by reason of the application of Section 280G or Section 4999 of the Code.

Certain Excise Taxes. (i) In the event it shall be determined that any payment that is either received by you payment, award, benefit or paid distribution (or any acceleration of any payment, award, benefit or distribution) by the Company on your behalf or Gemplus to or for the benefit of Executive, whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any property, or any other benefit provided to you additional payments required under this letter agreement or under any other plan, arrangement or agreement with the Company or any other person whose payments or benefits are treated as contingent on a change of ownership or control of the Company (or in the ownership of a substantial portion of the assets of the Company) or any person affiliated with the Company or such person (but only if such payment or other benefit is in connection with your employment by or other services to the CompanySection 15(b) (collectively the “Company "Payments”) will "), would be subject to the excise tax (the “"Excise Tax”") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (and any similar tax that may hereafter be imposed by any taxing authoritythe "Code"), then you will be entitled to receive either the Company shall pay Executive an additional cash payment (ia "Gross-Up Payment") in an amount such that after payment by Executive of all taxes (including the full net Federal, state, local and foreign income and employment taxes and any Excise Tax and taking into account the effects of Section 68 of the Code) imposed upon the Gross-Up Payment, he retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. The Gross-Up Payment under this Section 15(b) with respect to any Payment shall be made no later than the earlier of (A) thirty (30) days following such Payment and (B) the earliest date upon which the Company Payments or its Successor is required to withhold any portion of the Excise Tax with respect to such Payment. (ii) All determinations required to be made under this Section 15(b), including whether and when a portion Gross-Up Payment is required and the amount of such Gross-Up Payment, as well as the assumptions to be utilized in arriving at such determinations, shall be made by a "big four" public accounting firm that mutually acceptable to the Company and Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from the Company or Executive that there has been a Payment, or such earlier time as is requested by the Company or reasonably requested by Executive (collectively, the "Determination). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish him with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on his applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In determining the amount of the Gross-Up Payment, Executive shall be deemed to pay Federal, state, local and foreign income and employment taxes at the actual marginal rate of Federal, state, local and foreign income and employment taxation paid by Executive for the calendar year in which the Payment and the Gross-Up Payment is made with respect to the Payments, taking into account the effects of Section 68 of the Code. (iii) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments having a value which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made (" Overpayment"), consistent with the calculations required to be made hereunder. In the event that Executive is thereafter required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with after-tax reimbursement for any penalties assessed against Executive and with interest at the rate equal to $1 less than three (3) times your “base amount” (as such term is defined the discount rate required to be used in calculating the present value of the Payments under Section 280G(b)(3)(A280G(d)(4) of the Code)) shall be promptly paid by the Company to or for the benefit of Executive. In the event the amount of the Gross-Up Payment exceeds the amount necessary to reimburse Executive, whichever of clauses (i) and (ii), after taking into account applicable federal, state, and local income taxes and the Excise Tax, results in the receipt by you on an after-tax basis, for his Excise Tax, the Accounting Firm shall determine the amount of the greatest portion Overpayment that has been made and any such Overpayment (together with interest at the rate equal to the discount rate required to be used in calculating the present value of the Company Payments. Any determination required Payments under this paragraph shall be made in writing by the independent public accountant of the Company (the “Accountants”), whose determination shall be conclusive and binding for all purposes upon the Company and you. For purposes of making any calculation required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 Section 280G(d)(4) of the Code. If there is a reduction of ) shall be promptly paid to the Company Payments pursuant to this paragraph, such reduction by Executive. Executive shall occur in the following order: (A) cooperate with any cash severance payable reasonable requests by reference to your Base Salary or Annual Bonus, (B) any other cash amount payable to you, (C) any employee benefit valued as a “parachute payment,” and (D) acceleration of vesting of any outstanding equity award. In no event whatsoever shall you be entitled to a tax gross-up or other payment in respect of any excise tax, interest or penalties that may be imposed on the Company Payments by reason of in connection with any contests or disputes with the application of Section 280G or Section 4999 of Internal Revenue Service in connection with the CodeExcise Tax.