Section 280G Gross-Up Payment. (i) Anything in this Agreement to the contrary notwithstanding and except as set forth below in this Section 6(i), in the event it shall be determined that any payment or distribution by Employer, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which Employer or Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such 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 income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax 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. Notwithstanding the foregoing provisions of this Section 6(i), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. (ii) Subject to the provisions of Section 6(iii), all determinations required to be made under this Section 6, 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 PriceWaterhouseCoopers LLP such other certified public accounting firm reasonably acceptable to Employer as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer and the Executive within 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 Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Employer to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer will be inadequate and that additional Gross- Up Payments by Employer should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer exhaust its remedies pursuant to Section 6(iii) and the Executive thereafter are 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 Employer to or for the benefit of the Executive. (iii) The Executive shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall: (a) give Employer any information reasonably requested by Employer relating to such claim, (b) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer and reasonably acceptable to the Executive, (c) cooperate with Employer in good faith in order effectively to contest such claim, and (d) permit Employer to participate in any proceedings relating to such claim; provided, however, that 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 the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii), Employer shall control all proceedings taken in connection with such contest and, at their 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 their sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer shall determine; provided, however, that if Employer directs the Executive to pay such claim and ▇▇▇ for a refund, Employer 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer'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. (iv) If, after the receipt by the Executive of an amount advanced by Employer pursuant to Section 6(iii), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's continued compliance with the requirements of this Section 6) promptly pay to Employer 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 Employer pursuant to Section 6(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does not notify the Executive in writing of their intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 4 contracts
Sources: Change of Control Severance Agreement (BSB Bancorp Inc), Change of Control Severance Agreement (BSB Bancorp Inc), Change of Control Severance Agreement (BSB Bancorp Inc)
Section 280G Gross-Up Payment. (ia) Anything in this Agreement to the contrary notwithstanding and except as set forth below in this Section 6(i11(a), in the event it shall be determined that any payment or distribution by the Employer, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which the Employer or the Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 611) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such 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 income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax 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. Notwithstanding the foregoing provisions of this Section 6(i11(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(iib) Subject to the provisions of Section 6(iii11(c), all determinations required to be made under this Section 611, 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 PriceWaterhouseCoopers LLP or such other certified public accounting firm reasonably acceptable to the Employer as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to the Employer and the Executive within 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 Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to the Employer to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Employer. Any Gross-Up Payment, as determined pursuant to this Section 611, shall be paid by the Employer to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by the Employer will be inadequate and that additional Gross- Gross-Up Payments by the Employer should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Employer exhaust its remedies pursuant to Section 6(iii11(c) and the Executive thereafter are 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 Employer to or for the benefit of the Executive.
(iiic) The Executive shall notify the Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Employer of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise the Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to the Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(ai) give the Employer any information reasonably requested by the Employer relating to such claim,
(bii) take such action in connection with contesting such claim as the Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Employer and reasonably acceptable to the Executive,
(ciii) cooperate with the Employer in good faith in order effectively to contest such claim, and
(div) permit the Employer to participate in any proceedings relating to such claim; provided, however, that the 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 the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii11(c), the Employer shall control all proceedings taken in connection with such contest and, at their 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 their its sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer shall determine; provided, however, that if the Employer directs the Executive to pay such claim and ▇▇▇ for a refund, the Employer 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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 Employer'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.
(ivd) If, after the receipt by the Executive of an amount advanced by the Employer pursuant to Section 6(iii11(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Employer's continued compliance with the requirements of this Section 611) promptly pay to the Employer 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 Employer pursuant to Section 6(iii11(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Employer does not notify the Executive in writing of their its intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 3 contracts
Sources: Employment Agreement (BSB Bancorp Inc), Employment Agreement (BSB Bancorp Inc), Employment Agreement (BSB Bancorp Inc)
Section 280G Gross-Up Payment. (ia) Anything in this Agreement to the contrary notwithstanding and except as set forth below in this Section 6(i6(a), in the event it shall be determined that any payment or distribution by Employer, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which Employer or Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such 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 income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax 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. Notwithstanding the foregoing provisions of this Section 6(i6(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Gross- Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(iib) Subject to the provisions of Section 6(iii6(c), all determinations required to be made under this Section 6, 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 PriceWaterhouseCoopers LLP or such other certified public accounting firm reasonably acceptable to Employer as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer and the Executive within 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 Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Employer to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer will be inadequate and that additional Gross- Gross-Up Payments by Employer should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer exhaust its remedies pursuant to Section 6(iii6(c) and the Executive thereafter are 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 Employer to or for the benefit of the Executive.
(iiic) The Executive shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(ai) give Employer any information reasonably requested by Employer relating to such claim,
(bii) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer and reasonably acceptable to the Executive,
(ciii) cooperate with Employer in good faith in order effectively to contest such claim, and
(div) permit Employer to participate in any proceedings relating to such claim; provided, however, that 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 the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii6(c), Employer shall control all proceedings taken in connection with such contest and, at their 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 their sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer shall determine; provided, however, that if Employer directs the Executive to pay such claim and ▇▇▇ for a refund, Employer 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer'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.
(ivd) If, after the receipt by the Executive of an amount advanced by Employer pursuant to Section 6(iii6(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's continued compliance with the requirements of this Section 6) promptly pay to Employer 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 Employer pursuant to Section 6(iii6(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does not notify the Executive in writing of their intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 2 contracts
Sources: Change of Control Severance Agreement (BSB Bancorp Inc), Change of Control Severance Agreement (BSB Bancorp Inc)
Section 280G Gross-Up Payment. (ia) Anything in this Agreement to the contrary notwithstanding and except as set forth below in this Section 6(i11(a), in the event it shall be determined that any payment or distribution by Employerthe Employers, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which any Employer or Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 611) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such 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 income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax 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. Notwithstanding the foregoing provisions of this Section 6(i11(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(iib) Subject to the provisions of Section 6(iii11(c), all determinations required to be made under this Section 611, 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 PriceWaterhouseCoopers PricewaterhouseCoopers LLP or such other certified public accounting firm reasonably acceptable to Employer the Employers as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer the Employers and the Executive within 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 Employerthe Employers. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer the Employers to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employerthe Employers. Any Gross-Up Payment, as determined pursuant to this Section 611, shall be paid by Employer the Employers to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer the Employers and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer the Employers will be inadequate and that additional Gross- Gross-Up Payments by Employer the Employers should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer the Employers exhaust its their remedies pursuant to Section 6(iii11(c) and the Executive thereafter are 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 Employer the Employers to or for the benefit of the Executive.
(iiic) The Executive shall notify Employer the Employers in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer the Employers of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer the Employers of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer the Employers (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Employers notify the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(ai) give Employer the Employers any information reasonably requested by Employer the Employers relating to such claim,
(bii) take such action in connection with contesting such claim as Employer the Employers shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer the Employers and reasonably acceptable to the Executive,
(ciii) cooperate with Employer the Employers in good faith in order effectively to contest such claim, and
(div) permit Employer the Employers to participate in any proceedings relating to such claim; provided, however, that Employer the Employers 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 tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii11(c), Employer the Employers shall control all proceedings taken in connection with such contest and, at their 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 their its sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer the Employers shall determine; provided, however, that if Employer directs the Employers direct the Executive to pay such claim and ▇▇▇ for a refund, Employer the Employers 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer's the Employers' 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.
(ivd) If, after the receipt by the Executive of an amount advanced by Employer the Employers pursuant to Section 6(iii11(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's the Employers' continued compliance with the requirements of this Section 611) promptly pay to Employer the Employers 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 Employer the Employers pursuant to Section 6(iii11(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does the Employers do not notify the Executive in writing of their its intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 1 contract
Section 280G Gross-Up Payment. (i) Anything in this Agreement to the contrary notwithstanding and except as set forth below in this Section 6(i14(i), in the event it shall be determined that any payment or distribution by Employerthe Employers, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which any Employer or Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 614) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such 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 income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax 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. Notwithstanding the foregoing provisions of this Section 6(i14(i), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(ii) Subject to the provisions of Section 6(iii14(ii), all determinations required to be made under this Section 614, 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 PriceWaterhouseCoopers LLP such other certified public accounting firm reasonably acceptable to Employer the Employers as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer the Employers and the Executive within 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 Employerthe Employers. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer the Employers to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employerthe Employers. Any Gross-Up Payment, as determined pursuant to this Section 614, shall be paid by Employer the Employers to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer the Employers and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer the Employers will be inadequate and that additional Gross- Gross-Up Payments by Employer the Employers should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer the Employers exhaust its their remedies pursuant to Section 6(iii14(iii) and the Executive thereafter are required 45 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 Employer the Employers to or for the benefit of the Executive.
(iii) The Executive shall notify Employer the Employers in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer the Employers of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer the Employers of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer the Employers (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Employers notify the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(a) give Employer the Employers any information reasonably requested by Employer the Employers relating to such claim,
(b) take such action in connection with contesting such claim as Employer the Employers shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer the Employers and reasonably acceptable to the Executive,
(c) cooperate with Employer the Employers in good faith in order effectively to contest such claim, and
(d) permit Employer the Employers to participate in any proceedings relating to such claim; provided, however, that Employer the Employers 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 tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii14(iii), Employer the Employers shall control all proceedings taken in connection with such contest and, at their 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 their sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer the Employers shall determine; provided, however, that if Employer directs the Employers direct the Executive to pay such claim and ▇▇▇ for a refund, Employer the Employers 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer's the Employers' 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.
(iv) If, after the receipt by the Executive of an amount advanced by Employer the Employers pursuant to Section 6(iii14(iii), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's the Employers' continued compliance with the requirements of this Section 614) promptly pay to Employer the Employers 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 Employer the Employers pursuant to Section 6(iii14(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does the Employers do not notify the Executive in writing of their intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 1 contract
Section 280G Gross-Up Payment. (i) Anything in this Agreement Subject to the contrary notwithstanding and except as set forth below in this Section 6(i)10(b)(ii) below, in the event it that Executive shall be determined that any payment or distribution become entitled to payments and/or benefits provided by Employer, this Agreement or any other member amounts in the "nature of compensation" (whether pursuant to the affiliated group (as determined for purposes terms of Sections 280G and 4999 any plan, arrangement or agreement with the Company, any person whose actions result in a change of ownership or effective control covered by Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code") or any person affiliated with the Company or such person) as a result of which Employer such change in ownership or Corporation is a membereffective control (collectively, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise"Company Payments"), but determined without regard to any additional payments required under this Section 6) (a "Payment") would and such Company Payments will be subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the Code (and any similar tax that may hereafter be imposed by any taxing authority) as a result of a change in ownership or any interest or penalties are incurred by effective control of the Company, the Company shall pay to Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as at the "Excise Tax"), then the Executive shall be entitled to receive time specified in Section 10(b)(v) hereof an additional payment amount (a the "Gross-Up Payment") in an amount such that the net amount retained by Executive, after payment by deduction of any Excise Tax on the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (Company Payments and any interest U.S. federal, state, and penalties imposed with respect thereto) and Excise Tax imposed local income or payroll tax upon the Gross-Up PaymentPayment provided for by this Section 10(b)(i), but before deduction for any U.S. federal, state, and local income or payroll tax on the Executive retains an amount of the Gross-Up Payment Company Payments, shall be equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 6(i), if it shall be determined that the Executive is entitled to a Gross-Up Company Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(ii) Subject Notwithstanding anything contained in Section 10.1(b)(i) or any other provision of this Agreement to the provisions contrary, if a reduction in the amount of Section 6(iiithe Company Payments by an amount up to but not in excess of one hundred thousand dollars ($100,000) would avoid the imputation of any Excise Tax on the remaining Company Payments (after such reduction), all determinations required then the Company Payments shall be reduced (but not below zero) so that the maximum amount of the Company Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Company Payments to be made under this Section 6subject to the Excise Tax. Unless Executive shall have given prior written notice to the Company to effectuate a reduction in the Company Payments if such a reduction is required, including the Company shall reduce or eliminate the Company Payments by first reducing or eliminating any cash severance benefits, then by reducing or eliminating any accelerated vesting of stock options or stock appreciation rights, then by reducing or eliminating any accelerated vesting of other equity-based awards, then by reducing or eliminating any other remaining Company Payments.
(iii) For purposes of determining whether and when any of the Company Payments will be subject to the Excise Tax and, in such event, whether a Gross-Up Payment or a reduction in Company Payments is required pursuant to Sections 10(b)(i) and 10(b)(ii) (the amount of such Company Payments and, if applicable, any Gross-Up Payment and being collectively referred to hereinafter as the assumptions to be utilized in arriving at such determination"Total Payments"), (A) the Total Payments shall be made by PriceWaterhouseCoopers LLP such other treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "parachute payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless and except to the extent that, in the opinion of the Company's independent certified public accounting firm reasonably acceptable accountants appointed prior to Employer any change in ownership (as may be designated in writing defined under Section 280G(b)(2) of the Code) or tax counsel selected by such accountants or the Executive Company (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer and the Executive within 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 Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Employer to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer will be inadequate and that additional Gross- Up Payments by Employer should have been made ("UnderpaymentAccountants"), consistent with the calculations required to be made hereunder. In the event that Employer exhaust its remedies pursuant to Section 6(iii) and the Executive thereafter are 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 Employer to or for the benefit of the Executive.
(iii) The Executive shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(a) give Employer any information reasonably requested by Employer relating to such claim,
(b) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer and reasonably acceptable to the Executive,
(c) cooperate with Employer in good faith in order effectively to contest such claim, and
(d) permit Employer to participate in any proceedings relating to such claim; provided, however, that 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 the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii), Employer shall control all proceedings taken in connection with such contest and, at their 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 their sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer shall determine; provided, however, that if Employer directs the Executive to pay such claim and ▇▇▇ for a refund, Employer 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer'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.
(iv) If, after the receipt by the Executive of an amount advanced by Employer pursuant to Section 6(iii), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's continued compliance with the requirements of this Section 6) promptly pay to Employer 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 Employer pursuant to Section 6(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does not notify the Executive in writing of their intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 1 contract
Sources: Employment Agreement (Pacific Sunwear of California Inc)
Section 280G Gross-Up Payment. (i) Anything in this Agreement Should the total of all payments made ----------------------------- to the contrary notwithstanding and except as set forth below in this Section 6(i), in the event it shall be determined that any payment or distribution by Employer, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which Employer or Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise taxAgreement, together with any such interest and penaltiesother payments which the Executive has a right to receive from the Corporation, are hereinafter collectively referred to as the "Excise Tax"Bank, any of the other subsidiaries of the Corporation, or any successors of any of the foregoing, result in the imposition of an excise tax under Internal Revenue Code Section 4999 (or any successor thereto), then the Executive shall be entitled to receive an additional "excise tax" adjustment payment (a "Gross-Up Payment") in an amount such that that, after the payment of all federal and state income and excise taxes, the Executive will be in the same after-tax position as if no excise tax had been imposed. Any payment or benefit which is required to be included under Internal Revenue Code Sections 280G or 4999 (or any successor provisions thereto) for purposes of determining whether an excise tax is payable shall be deemed a payment "made to the Executive" or a payment "which the Executive has a right to receive" for purposes of this provision. The Corporation (or its successor) shall be responsible for the costs of calculation of the excise tax by the Corporation's independent certified accountant and tax counsel and shall notify the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal excise tax due prior to the Excise Tax imposed upon the Paymentstime such excise tax is due. Notwithstanding the foregoing provisions of this Section 6(i), if If at any time it shall be is determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the additional "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be excise tax" adjustment payment previously made to the Executive and was insufficient to cover the Paymentseffect of the excise tax, in the aggregate, excise tax gross-up payment pursuant to this provision shall be reduced to the Reduced Amount.
(ii) Subject to the provisions of Section 6(iii), all determinations required to be made under this Section 6, 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 PriceWaterhouseCoopers LLP such other certified public accounting firm reasonably acceptable to Employer as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer and the Executive within 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 Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer increased to make the determinations required hereunder (which accounting firm shall then be referred Executive whole, including an amount to as cover the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Employer to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer will be inadequate and that additional Gross- Up Payments by Employer should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer exhaust its remedies pursuant to Section 6(iii) and the Executive thereafter are required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount penalties resulting from incorrect or late payment of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for excise tax resulting from the benefit of the Executiveprior calculation.
(iii) The Executive shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(a) give Employer any information reasonably requested by Employer relating to such claim,
(b) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer and reasonably acceptable to the Executive,
(c) cooperate with Employer in good faith in order effectively to contest such claim, and
(d) permit Employer to participate in any proceedings relating to such claim; provided, however, that 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 the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii), Employer shall control all proceedings taken in connection with such contest and, at their 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 their sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer shall determine; provided, however, that if Employer directs the Executive to pay such claim and ▇▇▇ for a refund, Employer 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer'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.
(iv) If, after the receipt by the Executive of an amount advanced by Employer pursuant to Section 6(iii), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's continued compliance with the requirements of this Section 6) promptly pay to Employer 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 Employer pursuant to Section 6(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does not notify the Executive in writing of their intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 1 contract
Sources: Supplemental Executive Benefit and Change in Control Agreement (Dauphin Deposit Corp)
Section 280G Gross-Up Payment. (i) Anything in this Agreement Should the total of all payments ----------------------------- made to the contrary notwithstanding and except as set forth below in this Section 6(i), in the event it shall be determined that any payment or distribution by Employer, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which Employer or Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise taxAgreement, together with any such interest and penaltiesother payments which the Executive has a right to receive from the Corporation, are hereinafter collectively referred to as the "Excise Tax"Bank, any of the other subsidiaries of the Corporation, or any successors of any of the foregoing, result in the imposition of an excise tax under Internal Revenue Code Section 4999 (or any successor thereto), then the Executive shall be entitled to receive an additional "excise tax" adjustment payment (a "Gross-Up Payment") in an amount such that that, after the payment of all federal and state income and excise taxes, the Executive will be in the same after-tax position as if no excise tax had been imposed. Any payment or benefit which is required to be included under Internal Revenue Code Sections 280G or 4999 (or any successor provisions thereto) for purposes of determining whether an excise tax is payable shall be deemed a payment "made to the Executive" or a payment "which the Executive has a right to receive" for purposes of this provision. The Corporation (or its successor) shall be responsible for the costs of calculation of the excise tax by the Corporation's independent certified accountant and tax counsel and shall notify the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal excise tax due prior to the Excise Tax imposed upon the Paymentstime such excise tax is due. Notwithstanding the foregoing provisions of this Section 6(i), if If at any time it shall be is determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the additional "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be excise tax" adjustment payment previously made to the Executive and was insufficient to cover the Paymentseffect of the excise tax, in the aggregate, excise tax gross-up payment pursuant to this provision shall be reduced to the Reduced Amount.
(ii) Subject to the provisions of Section 6(iii), all determinations required to be made under this Section 6, 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 PriceWaterhouseCoopers LLP such other certified public accounting firm reasonably acceptable to Employer as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer and the Executive within 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 Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer increased to make the determinations required hereunder (which accounting firm shall then be referred Executive whole, including an amount to as cover the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Employer to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer will be inadequate and that additional Gross- Up Payments by Employer should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer exhaust its remedies pursuant to Section 6(iii) and the Executive thereafter are required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount penalties resulting from incorrect or late payment of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for excise tax resulting from the benefit of the Executiveprior calculation.
(iii) The Executive shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(a) give Employer any information reasonably requested by Employer relating to such claim,
(b) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer and reasonably acceptable to the Executive,
(c) cooperate with Employer in good faith in order effectively to contest such claim, and
(d) permit Employer to participate in any proceedings relating to such claim; provided, however, that 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 the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii), Employer shall control all proceedings taken in connection with such contest and, at their 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 their sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer shall determine; provided, however, that if Employer directs the Executive to pay such claim and ▇▇▇ for a refund, Employer 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer'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.
(iv) If, after the receipt by the Executive of an amount advanced by Employer pursuant to Section 6(iii), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's continued compliance with the requirements of this Section 6) promptly pay to Employer 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 Employer pursuant to Section 6(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does not notify the Executive in writing of their intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 1 contract
Section 280G Gross-Up Payment. (i) Anything in this Agreement to the ----------------------------- contrary notwithstanding and except as set forth below in this Section 6(i), in the event it shall be determined that any payment or distribution by Employer, or any other member of the affiliated group (as determined for purposes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which Employer or Corporation is a member, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such 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 income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax 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. Notwithstanding the foregoing provisions of this Section 6(i), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-after- tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(ii) Subject to the provisions of Section 6(iii), all determinations required to be made under this Section 6, 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 PriceWaterhouseCoopers LLP such other certified public accounting firm reasonably acceptable to Employer as may be designated in writing by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Employer and the Executive within 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 Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Employer to the Executive within five business days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments made by Employer will be inadequate and that additional Gross- Gross-Up Payments by Employer should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer exhaust its remedies pursuant to Section 6(iii) and the Executive thereafter are 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 Employer to or for the benefit of the Executive.
(iii) The Executive shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive receives written notice of such claim and shall apprise Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days following the date on which the Executive gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:
(a) give Employer any information reasonably requested by Employer relating to such claim,
(b) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer and reasonably acceptable to the Executive,
(c) cooperate with Employer in good faith in order effectively to contest such claim, and
(d) permit Employer to participate in any proceedings relating to such claim; provided, however, that 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 the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii), Employer shall control all proceedings taken in connection with such contest and, at their 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 their sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer shall determine; provided, however, that if Employer directs the Executive to pay such claim and ▇▇▇ for a refund, Employer 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 tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employer'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.
(iv) If, after the receipt by the Executive of an amount advanced by Employer pursuant to Section 6(iii), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employer's continued compliance with the requirements of this Section 6) promptly pay to Employer 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 Employer pursuant to Section 6(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer does not notify the Executive in writing of their intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed), 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 the Gross-Up Payment required to be paid.
Appears in 1 contract
Sources: Change of Control Severance Agreement (BSB Bancorp Inc)
Section 280G Gross-Up Payment. (ia) Anything in this Agreement to the contrary notwithstanding and except as set forth below in this Section 6(i)notwithstanding, in the event it shall be determined that any compensation, payment or distribution by Employerthe Company to or for the benefit of Executive, whether paid or any other member payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the affiliated group (as determined for purposes of Sections 280G and "Severance Payments"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") of which Employer or Corporation is a member), to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such 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 the net amount retained by Executive, after deduction of any Excise Tax on the Severance Payments, any Federal, state, and local income tax, employment tax and Excise Tax upon the payment provided by the Executive of all taxes (including this subsection, and any interest or and/or penalties imposed assessed with respect to such taxes)Excise Tax, including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment shall be equal to the Excise Tax imposed upon the Severance Payments. Notwithstanding the foregoing provisions of this Section 6(i), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(iib) Subject to the provisions of Section 6(iii6(c), all determinations required to be made under this Section 66(b), 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 determinationPayment, shall be made by PriceWaterhouseCoopers LLP such other certified public a nationally recognized accounting firm reasonably acceptable to Employer as may be designated in writing selected by the Executive Company (the "Accounting Firm") ), which shall provide detailed supporting calculations both to Employer the Company and the Executive within 15 fifteen (15) business days of the receipt date of notice from the Executive that there has been a Paymenttermination of Executive's employment under this agreement, if applicable, or at such earlier time as is reasonably requested by Employerthe Company or Executive. In For purposes of determining the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm reasonably acceptable to Employer to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses amount of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rates of individual taxation in the state and locality of Executive's residence on the date of termination of Executive's employment under this agreement, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. The initial Gross-Up Payment, if any, as determined pursuant to this Section 66(b), shall be paid by Employer to the Executive within five business (5) days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, the Company shall furnish Executive with an opinion of counsel 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 Employer the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the initial Gross-Up Payments which will not have been made by Employer will be inadequate and that additional Gross- Up Payments by Employer the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that Employer exhaust the Company exhausts its remedies pursuant to Section 6(iii6(c) and the Executive thereafter are is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred occurred, consistent with the calculations required to be made hereunder, and any such Underpayment, and any interest and penalties imposed on the Underpayment and required to be paid by Executive in connection with the proceedings described in Section 6(c), shall be promptly paid by Employer the Company to or for the benefit of the Executive.
(iiic) The Executive shall notify Employer the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer the Company of a the Gross-Up up Payment. Such notification shall be given as soon as practicable but no later than 10 ten (10) business days after the Executive receives written notice knows of such claim and shall apprise Employer the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of 30 days the 30-day period following the date on which the Executive he gives such notice to Employer the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer the Company notifies the Executive in writing prior to the expiration of such period that they desire it desires to contest such claim, provided that the Company has set aside adequate reserves to cover the Underpayment and any interest and penalties thereon that may accrue, Executive shall:
(ai) give Employer the Company any information reasonably requested by Employer the Company relating to such claim,
(bii) take such action in connection with contesting such claim as Employer the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by Employer and reasonably acceptable to the ExecutiveCompany,
(ciii) cooperate with Employer the Company in good faith in order to effectively to contest such claim, and
(div) permit Employer the Company to participate in any proceedings relating to such claim; provided, however, that Employer 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 tax (tax, including interest and penalties with respect thereto) , imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(iii6(c), Employer the Company shall control all proceedings taken in connection with such contest and, at their its sole option, may pursue or forgo forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at their its sole option, either direct the Executive to pay the tax claimed and ▇▇▇ 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 Employer the Company shall determine; provided, however, that if Employer the Company directs the Executive to pay such claim and ▇▇▇ for a refund, Employer the Company shall advance the amount of such payment to the Executive, 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 tax (tax, including interest or penalties with respect thereto) , imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided 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, Employerthe 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 issues raised by the Internal Revenue Service or any other taxing authority.
(ivd) If, after the receipt by the Executive of an amount advanced by Employer the Company pursuant to Section 6(iii6(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Employerthe Company's continued compliance complying with the requirements of this Section 66(c)) promptly pay to Employer 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 Employer the Company pursuant to Section 6(iii6(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Employer the Company does not notify the Executive in writing of their its intent to contest such denial of refund prior to the expiration of 30 days after such determination (or if any such contest shall be finally determined in a manner adverse to such refund being allowed)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 the Gross-Up Payment required to be paid.
Appears in 1 contract