EXHIBIT 10.1
KARIN D. MAYHEW
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement”) is made and entered into
as of October 4, 2006 (the “Effective Date”) and
amended and restated as of December 3, 2008, by and between
Health Net, Inc., a Delaware corporation (the
“Company”), with its principal place of business
located at 21650 Oxnard Street, Woodland Hills, California 91367,
and Karin D. Mayhew (“Executive”).
RECITALS
WHEREAS, the Company and Executive
are party to an Amended and Restated Employment Agreement, dated
October 4, 2006 (the “Prior Agreement”);
and
WHEREAS, the Company and Executive
desire to amend and restate the Prior Agreement to conform it to
the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended, and the Treasury Regulations and Internal
Revenue Service guidance thereunder.
NOW, THEREFORE, in consideration of
the following covenants, conditions and promises contained herein,
and other good and valuable consideration, the Company and
Executive hereby agree as follows:
1. Duties and Salary
.
A. Duties . Executive’s
title is Senior Vice President, Organization Effectiveness, but may
be changed at the discretion of the Company to a title that
reflects a similarly situated senior executive position. Executive
shall report directly to Jay Gellert, President and Chief Executive
Officer of the Company, but Executive’s reporting
relationship may be changed from time to time at the discretion of
the Company. Executive’s duties and responsibilities are to
provide executive leadership and management of the corporate
organization effectiveness functions, but the Company reserves the
right to assign Executive other duties as needed and to change
Executive’s duties from time to time on reasonable notice,
based on Executive’s skills and the needs of the
Company.
B. Salary . Executive will be
paid an annual base salary of $412,500, which salary will be paid
on a pro-rated bi-weekly basis, less applicable withholdings
(“Base Salary”), covering all hours worked. Generally,
Executive’s Base Salary will be reviewed annually, but the
Company reserves the right to change Executive’s compensation
from time-to-time. Pursuant to the charter of the Compensation
Committee of the Company’s Board of Directors (the
“Committee”), any adjustment to Executive’s
compensation must be made with the approval of the Committee and,
in the event that Executive constitutes one of the top two
(2) highest paid executive officers of the Company, with the
ratification of the Company’s Board of Directors.
C. Disclosure of Personal
Compensation Information . As an “executive
officer” of the Company (as such term is defined in the rules
and regulations of the Securities
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and Exchange Commission (“SEC”)),
information regarding Executive’s employment arrangements
with the Company, including, among other things, the terms of this
Agreement and any stock option agreement, restricted stock
agreement, restricted stock unit agreement and/or severance
agreement Executive enters into with the Company from time to time
(collectively, “Personal Compensation Information”),
may be disclosed in filings with the SEC, the New York Stock
Exchange (“NYSE”) and/or other regulatory organizations
upon the occurrence of certain triggering events. Such triggering
events include, but are not limited to, the execution of this
Agreement and any amendments thereto, changes in Executive’s
Base Salary, any annual incentive payment (whether in the form of
cash or equity) awarded to Executive (in the past or after the date
hereof), and the establishment of performance goals under the
Company’s incentive plans. Executive’s execution of
this Agreement will serve as Executive’s acknowledgement that
Executive’s Personal Compensation Information may be publicly
disclosed from time to time in filings with the SEC, NYSE or
otherwise as required by applicable law.
2. Adjustments and Changes in
Employment Status . Executive understands that the Company
reserves the right to make personnel decisions regarding
Executive’s employment, including, but not limited to,
decisions regarding any promotion, salary adjustment, transfer or
disciplinary action, up to and including termination, consistent
with the needs of the business of the Company.
3. Protection of Proprietary and
Confidential Information . Executive agrees that
Executive’s employment creates a relationship of confidence
and trust with the Company with respect to Proprietary and
Confidential Information (as defined below) of the Company learned
by Executive during Executive’s employment.
A. Executive agrees not to directly
or indirectly use or disclose any of the Proprietary and
Confidential Information of the Company or any of its affiliates at
any time except in connection with the services Executive provides
to such entities. “ Proprietary and Confidential
Information ” shall mean trade secrets, confidential
knowledge, data or any other proprietary or confidential
information of the Company or any of its affiliates, or of any
customers, members, employees or directors of any of such entities,
but shall not include any information that (i) was publicly
known and made generally available in the public domain prior to
the time of disclosure to Executive by the Company or
(ii) becomes publicly known and made generally available after
disclosure to Executive by the Company other than as a result of a
disclosure by Executive in violation of this Agreement. By way of
illustration but not limitation, “Proprietary and
Confidential Information” includes: (i) trade secrets,
documents, memoranda, reports, files, correspondence, lists and
other written and graphic records affecting or relating to any such
entity’s business; (ii) confidential marketing
information including without limitation marketing strategies,
customer and client names and requirements, services, prices,
margins and costs; (iii) confidential financial information;
(iv) personnel information (including without limitation
employee compensation); and (v) other confidential business
information.
B. Executive further agrees that at
all times during Executive’s employment and thereafter,
Executive will keep in confidence and trust all Proprietary and
Confidential Information, and that Executive will not use or
disclose any Proprietary and Confidential Information or anything
related to such information without the written consent of the
Company, except as may be necessary in the ordinary course of
performing Executive’s duties to the Company.
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C. All Company property, including,
but not limited to, Proprietary and Confidential Information,
documents, data, records, apparatus, equipment and other physical
property, whether or not pertaining to Proprietary and Confidential
Information, provided to Executive by the Company or any of its
affiliates or produced by Executive or others in connection with
Executive’s providing services to the Company or any of its
affiliates shall be and remain the sole property of the Company or
its affiliates (as the case may be) and shall be returned promptly
to such appropriate entity as and when requested by such entity.
Executive shall return and deliver all such property upon
termination of Executive’s employment, and Executive may not
take any such property or any reproduction of such property upon
such termination.
D. Executive recognizes that the
Company and its affiliates have received and in the future will
receive information from third parties which is private,
proprietary or confidential information subject to a duty on such
entity’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes.
Executive agrees that during Executive’s employment, and
thereafter, Executive owes such entities and such third parties a
duty to hold all such private, proprietary or confidential
information received from third parties in the strictest confidence
and not to disclose it, except as necessary in carrying out
Executive’s work for such entities consistent with such
entities’ agreements with such third parties, and not to use
it for the benefit of anyone other than for such entities or such
third parties consistent with such entities’ agreements with
such third parties.
E. Executive’s obligations
under this Section 3 shall continue after the termination of
Executive’s employment and any breach of this Section 3
shall be a material breach of this Agreement.
4. Physical Exam . Executive
will be required, on an annual basis, to undergo a physical
examination and to send evidence that Executive has undergone such
exam (but in no case the results of such exam) to Debbie Colia,
Vice President, OE Consulting Services. The Company shall reimburse
Executive for any out-of-pocket expenses relating to the physical
examination that are not otherwise covered by Executive’s
health insurance plan.
5. Representations and Warranties
of Executive .
A. No Violation; No Conflicts
. Executive represents and warrants to the Company that the
entering into of this Agreement and Executive’s performance
of Executive’s duties hereunder, will not violate any
agreements with, or trade secrets of, any other person or entity.
Executive further represents and warrants that Executive does not
have any relationship or commitment to any other person or entity
that might be in conflict with Executive’s obligations to the
Company under this Agreement, including but not limited to outside
employment, sales broker relationships, investments or business
activities. Executive understands and agrees that while employed by
the Company Executive is expected to refrain from engaging in any
outside activities that might be in conflict with the business
interests of the Company. In addition, Executive represents and
warrants to the Company that Executive has not shared with or
disclosed to, and will not share with or disclose to, the Company
any proprietary or confidential information of Executive’s
previous employers or any other third party.
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B. Legal Proceedings .
Executive represents and warrants to the Company that Executive has
not been arrested, indicted, convicted or otherwise involved in any
criminal or civil action or legal matter that could affect
Executive’s ability to perform Executive’s duties
hereunder or that may have a negative impact on the Company, its
reputation or its operations. Executive agrees, to the extent
permitted by applicable law, to notify the Company’s General
Counsel immediately in the event that Executive becomes party to
any criminal or civil action or other legal matter in the future
that could have an affect on the foregoing
representation.
6. Executive Benefits
.
A. Employee Benefit Programs
. Executive shall be eligible to participate in the Company’s
various employee benefit programs and plans in place from time to
time as long as Executive remains employed by the Company and
Executive meets the applicable participation requirements. These
benefit programs and plans include paid time off
(“PTO”), holidays, group medical, dental, vision, term
life, and short and long term disability insurance and
participation in the Company’s 401(k) plan, tuition
reimbursement plan, deferred compensation plan, and Supplemental
Executive Retirement Plan (“SERP”). Under the SERP
Executive is entitled to vest and accrue a retirement benefit of up
to 50% of Executive’s Base Salary plus incentive
compensation. This SERP benefit is offset with other retirement
benefits provided by the Company to Executive and with 50% of
Executive’s Social Security benefits. Executive has received
credit for one additional year of service under the SERP upon
Executive’s completion of five years of service with the
Company. The Company or its subsidiaries or affiliates may modify,
terminate or amend any benefit or plan in its discretion,
retroactively or prospectively, subject only to applicable
law.
B. Required Insurance .
Executive is covered by workers’ compensation insurance and
state disability insurance, as required by state law.
C. Financial Counseling
Allowance . Executive is entitled to be reimbursed up to the
amount of $5,000 per year for documented costs incurred for
personal financial counseling services provided to Executive,
including tax preparation, as long as Executive remains employed by
the Company.
D. Incentive Bonus .
Executive is eligible to participate in the Health Net, Inc.
Executive Incentive Plan (“EIP”) in accordance with the
terms of the EIP, which provides Executive with a target
opportunity to earn each plan year up to 70% of Executive’s
Base Salary as additional compensation according to the terms of
the actual EIP documents. The bonus payment will range from 0% to
200% of target depending upon the actual results achieved, and
specific, individually tailored measures will be established by the
Company that must be achieved by Executive in order for Executive
to be eligible to receive bonus payments for a given plan year. It
is understood that the Committee and the Company will award bonus
amounts, if any, as it deems appropriate consistent with the
guidelines of the EIP.
E. Car Allowance . Executive
is entitled to a car allowance of $1,000 per month.
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F. Expenses . Subject to and
in accordance with the Company’s written policies for
business and travel expenses, Executive will receive reimbursement
for all business travel and other out-of-pocket expenses reasonably
incurred by Executive in the performance of Executive’s
duties pursuant to this Agreement.
7. Equity Grants .
A. Future Equity Grants . Any
future equity grants made to Executive will be granted under one of
the Company’s Long-Term Incentive Plans, and will be subject
to the terms of such plan and of the agreement executed in
connection with such grant. Any future equity grants to Executive
will be made at the discretion of the Committee.
B. Company Stock Ownership
Requirement . In accordance with the Executive Officer Stock
Ownership Policy adopted by the Board of Directors of the Company
(the “Executive Stock Ownership Policy”), Executive is
required to own shares of Common Stock of the Company having a
value of one times ( 1x) Executive’s Base Salary
in effect from time to time pursuant to this Agreement (the
“Stock Ownership Requirement”). The number of shares of
Common Stock Executive is required to own will be calculated based
on the average NYSE closing price per share of the Company’s
Common Stock (as adjusted for stock splits and similar changes to
the Common Stock) for the most recently completed fiscal year of
the Company.
Using Executive’s current
salary of $412,500 and a stock price of $39.3033, which is the
average closing price per share of the Company’s Common Stock
as of December 31, 2005, Executive’s current stock
ownership requirement is 10,495 (“Target Amount”). The
Target Amount is subject to change from time to time based on
(1) changes in the average closing sales price of the
Company’s Common Stock on an annual basis and (2) any
changes in Executive’s Base Salary made pursuant to and in
accordance with Section 1B of this Agreement. Any shares of
Company Common Stock that Executive owns, and any restricted stock
units or shares of restricted stock of the Company that Executive
owns and have vested count toward the Target Amount. Stock options,
unvested restricted stock units, unvested shares of restricted
stock and shares of Common Stock gifted to others do not count
toward the Target Amount. Executive will be notified on an annual
basis of any changes in Executive’s Target Amount.
C. Stock Plan Amendments . In
accordance with the Agreement dated January 1, 2001 between
Executive and the Company, Executive previously consented, pursuant
to Section 14 of the Company’s Second Amended and
Restated 1991 Stock Option Plan (the “1991 Plan”),
Section 6.2 of the Company’s 1997 Stock Option Plan, as
amended (the “1997 Plan”) and Section 6.2 of the
Company’s 1998 Stock Option Plan, as amended (the “1998
Plan,” and together with the 1991 Plan and the 1997 Plan, the
“Plans”), that the Plans, as amended by the amendments
to the Accelerated Provisions of the Plans set forth on Exhibit
A attached hereto, shall govern and apply to all of
Executive’s outstanding options under the Plans, regardless
of the date such options were granted. To the extent the option
agreements for Executive’s outstanding options under the
Plans state anything to the contrary, Executive and the Company
have agreed that such option agreement(s) are amended to be
consistent with the foregoing sentence.
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8. Term of Employment .
Executive’s employment with the Company is at the mutual
consent of Executive and the Company. Nothing in this Agreement is
intended to guarantee Executive’s continuing employment with
the Company or employment for any specific length of time.
Accordingly, either Executive or the Company may terminate the
employment relationship at any time, with or without advance notice
and with or without “Cause” (as defined below). Upon
termination of Executive’s employment for any reason, in
addition to any other payments that may be payable to Executive
hereunder, Executive (or Executive’s beneficiaries or estate)
will be paid (in each case to the extent not theretofore paid)
within thirty (30) days following Executive’s date of
termination (or such shorter period that may be required by
applicable law): (a) Executive’s annual Base Salary
through the date of termination, (b) any compensation
previously deferred by Executive (together with any interest and
earnings therein), (c) accrued but unused PTO,
(d) reimbursable expenses incurred by Executive prior to the
termination date and (e) amounts under any other compensatory
plan, arrangement or program payment to which Executive may be
entitled. This Agreement constitutes a final and fully binding
integrated agreement with respect to the at-will nature of the
employment relationship.
9. Termination of
Employment/Severance Pay .
A. Termination Without Cause Not
Following Change in Control . If Executive’s employment
is terminated by the Company without “Cause” (as
defined in Section 9(D) below) at any time that is not within
two (2) years after a “Change in Control” (as
defined below) of Health Net, Inc., Executive will be entitled to
receive, within thirty (30) days following the termination of
Executive’s employment, provided Executive signs a Separation
Agreement, Waiver and Release of Claims substantially in the form
attached hereto as Exhibit A , which is incorporated into
this Agreement by reference, (i) a lump sum cash payment equal
to twenty-four (24) months of Executive’s Base Salary in
effect immediately prior to the date of Executive’s
termination, and (ii) the continuation of Executive’s
medical, dental, vision, disability, life and accident benefits (as
maintained for Executive’s benefit immediately prior to the
date of Executive’s termination) (the “Benefits”)
for Executive and Executive’s dependents for a period of
twenty-four (24) months following the effective date of
Executive’s termination.
For purposes of this Agreement,
“ Change in Control ” is defined as any of the
following which occurs subsequent to the effective date of
Executive’s employment:
(i) Any person (as such term is
defined under Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)), corporation
or other entity (other than Health Net, Inc. or any of its
subsidiaries, or any employee benefit plan sponsored by Health Net,
Inc. or any of its subsidiaries) is or becomes the beneficial owner
(as such term is defined in Rule 13d-3 under the Exchange Act) of
securities of Health Net, Inc. representing twenty percent
(20%) or more of the combined voting power of the outstanding
securities of Health Net, Inc. which ordinarily (and apart from
rights accruing under special circumstances) have the right to vote
in the election of directors (calculated as provided in paragraph
(d) of such Rule 13d-3 in the case of rights to acquire Health
Net, Inc.’s securities) (the
“Securities”);
(ii) As a result of a tender offer,
merger, sale of assets or other major transaction, the persons who
are directors of Health Net, Inc. immediately prior to such
transaction cease to constitute a majority of the Board of
Directors of Health Net, Inc. (or any successor corporations)
immediately after such transaction;
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(iii) Health Net, Inc. is merged or
consolidated with any other person, firm, corporation or other
entity and, as a result, the shareholders of Health Net, Inc., as
determined immediately before such transaction, own less than
eighty percent (80%) of the outstanding Securities of the
surviving or resulting entity immediately after such
transaction:
(iv) A tender offer or exchange
offer is made and consummated for the ownership of twenty percent
(20%) or more of the outstanding Securities of Health Net,
Inc.;
(v) Health Net, Inc. transfers
substantially all of its assets to another person, firm,
corporation or other entity that is not a wholly-owned subsidiary
of Health Net, Inc.; or
(vi) Health Net, Inc. enters into a
management agreement with another person, firm, corporation or
other entity that is not a wholly-owned subsidiary of Health Net,
Inc. and such management agreement extends hiring and firing
authority over Executive to an individual or organization other
than Health Net, Inc.
B. Termination Without Cause or
For Good Reason Following Change in Control . If at any time
within two (2) years after a Change in Control of Health Net,
Inc. Executive’s employment is terminated by the Company
without Cause or Executive terminates Executive’s employment
for “Good Reason” (as defined below) (by giving the
Company at least fourteen (14) days prior written notice of
the effective date of termination), then Executive will be entitled
to receive, within thirty (30) days following the termination
of Executive’s employment, provided Executive signs a
Separation Agreement, Waiver and Release of Claims substantially in
the form attached hereto as Exhibit A , which is
incorporated into this Agreement by reference, (i) a lump sum
payment equal to thirty-six (36) months of Executive’s
Base Salary in effect immediately prior to the date of
Executive’s termination, and (ii) the continuation of
Executive’s Benefits for thirty-six (36) months
following Executive’s date of termination, provided ,
that Executive properly elects to continue those benefits under
COBRA, and provided , further , that in the event the
Company requests, in writing, prior to such voluntary termination
by Executive for Good Reason that Executive continue in the employ
of the Company for a period of time up to 90 days following such
Change in Control, then Executive shall forfeit such severance
allowance if Executive voluntarily leaves the employ of the Company
prior to the expiration of such period of time.
For purposes of this Agreement, the
term “ Good Reason ” means any of the following
which occurs, without Executive’s consent, within two
(2) years following the effective date of a Change in Control
as defined above:
(i) A substantial reduction in the
scope of Executive’s authority, duties or responsibilities
with the Company, except in connection with the termination of
Executive’s employment for Disability (as defined below),
normal retirement or Cause or by Executive voluntarily other than
for Good Reason;
7
(ii) A material reduction by the
Company in Executive’s base compensation (i.e.,
Executive’s Base Salary and/or annual target bonus) as in
effect immediately prior to any such reduction;
(iii) A relocation of Executive to a
work location more than fifty (50) miles from
Executive’s work location immediately prior to such proposed
relocation; provided that such proposed relocation results in a
materially greater commute for Executive based on Executive’s
residence immediately prior to such relocation; or
(iv) The failure of the Company to
obtain an assumption agreement from any successor contemplated
under Section 13 of this Agreement;
provided , however , that Executive must provide
notice to the Company of the existence of the condition described
above within ninety (90) days of the initial existence of the
condition, upon the notice of which the Company has thirty
(30) days during which it may remedy the condition, in
accordance with Treasury Regulation
Section 1.409A-1(n)(2)(ii).
C. Voluntary Termination .
Notwithstanding anything to the contrary in this Agreement, whether
express or implied, Executive may at any time terminate
Executive’s employment for any reason by giving the Company
fourteen (14) days prior written notice of the effective date
of termination. In the event that Executive voluntarily terminates
employment with the Company (except for Good Reason within two
(2) years after a Change in Control of Health Net, Inc.), then
Executive shall not be eligible to receive any payments or
continuation of Benefits set forth in this Section 9).
D. Termination by the Company for
Cause. The Company may terminate Executive’s employment
for Cause at any time with or without advance notice. In the event
of such termination, Executive will not be eligible to receive any
of the payments set forth in Section 9(A) or 9(B) above. For
purposes of this Agreement, a termination for “ Cause
” is defined as: (i) an act of dishonesty causing harm
to the Company or any of its affiliates, (ii) the knowing
unauthorized disclosure of confidential information relating to the
business of the Company or any of its affiliates,
(iii) habitual drunkenness or narcotic drug addiction,
(iv) conviction of a felony or a misdemeanor involving moral
turpitude , (v) willful refusal to perform or gross
neglect of the duties assigned to Executive, (vi) the willful
breach of any law that, directly or indirectly, affects the Company
or any of its affiliates, (vii) a material breach by Executive
following a Change in Control of those duties and responsibilities
of Executive that do not differ in any material respect from
Executive’s duties and responsibilities during the 90-day
period immediately prior to such Change in Control (other than as a
result of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on Executive’s part,
which is committed in bad faith or without reasonable belief that
such breach is in the best interests of the Company or any of its
affiliates and which is not remedied in a reasonable period of time
after receipt of written notice from the Company specifying such
breach, or (viii) breach of Executive’s obligations
hereunder (or under any Company policy) to protect the proprietary
and confidential information of the Company or any of its
affiliates.
E. Termination Due to Death or
Disability . In the event that Executive’s employment is
terminated at any time due to death or “Disability” (as
defined below), Executive (or Executive’s beneficiaries or
estate) shall be entitled to receive, provided Executive
(or
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Executive’s beneficiaries or estate, as
applicable) signs a Separation Agreement, Waiver and Release of
Claims substantially in the form attached hereto as Exhibit
A , which is incorporated into this Agreement by reference,
(i) continuation of Executive’s Benefits for a period of
12 months from the date of termination and (ii) a lump sum
payment equal to one times (1x) Executive’s Base Salary
in effect immediately prior to the date of Executive’s
termination, to be paid within thirty (30) days following
Executive’s termination of employment. For purposes of this
Agreement, a termination for “ Disability ”
shall mean a termination of Executive’s employment due to
Executive’s absence from Executive’s duties with the
Company on a full-time basis for at least 180 consecutive days as a
result of Executive’s incapacity due to physical or mental
illness.
10. Withholding . All
payments required to be made by the Company hereunder to Executive
or Executive’s estate or beneficiaries shall be subject to
the withholding of such amounts relating to taxes as the Company
may reasonably determine should be withheld pursuant to any
applicable law or regulation.
11. Potential Tax Consequences
for “Parachute” Payments .
A. Tax Gross-Up .
Notwithstanding any other provisions of this Agreement, in the
event that (i) any payment or distribution by the Company to
or for Executive’s benefit (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a Change in Control or
any person affiliated with the Company or such person) (all such
payments and distributions, including the severance payments and
benefits provided for in Section 9 hereof (the
“Severance Payments”), being hereinafter called
(“Total Payments”) would be subject (in whole or part)
to the excise tax imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), or any
successor provision enacted under the Code or any interest or
penalties (to the extent permitted under Treasury Regulation
Section 1.409A-3(i)(1)(v)) are incurred by 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”) and (ii) the amount of such
Total Payments subject to such Excise Tax exceeds $50,000, then the
Company shall pay to Executive an additional cash payment (the
“Tax Gross-Up”) so that after receipt of such Tax
Gross-Up, the payment of any additional federal, state and local
income taxes on such Tax Gross-Up amount and the payment of any
Excise Taxes, Executive shall receive such net amount of Total
Payments equal to the amount that Executive would have received if
no Excise Tax was due. If the amount of Total Payments subject to
the Excise Tax does not exceed $50,000, then the Tax-Gross-Up shall
not be paid and the Severance Payments shall be reduced (if
necessary, to zero) to the extent necessary so that no portion of
the Total Payments is subject to the Excise Tax.
B. Accounting Firm
Determination . All determinations required to be made under
this Section 11, including whether and when a Tax Gross-Up is
required and the amount of such Tax Gross-Up and the assumptions to
be utilized in arriving at such determination, shall be made by the
public accounting firm that, immediately prior to the Change in
Control, was the Company’s independent auditor (the
“Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and Executive within
fifteen (15) business days of the receipt of notice from
Executive that Executive has received Total Payments, or such
earlier
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time as is requested by the Company. All fees
and expenses of the Accounting Firm shall be borne solely by the
Company. Any Tax Gross-Up, as determined pursuant to this
Section 11, shall be paid by the Company to Executive within
five (5) days of the receipt of the Accounting Firm’s
determination. If the Accounting Firm determines that no Excise Tax
is payable by Executive, then the Accounting Firm shall furnish to
Executive a written opinion that failure to report the Excise Tax
on Executive’s applicable federal income tax return would not
result in the imposition of any tax assessment or a negligence or
similar penalty. As a result of any uncertainty in the application
of Section 4999 of the Code at the time of the determination
by the Accounting Firm hereunder, it is possible that Tax Gross-Up
which will not have been made by the Company should have been made
(“Underpayment”),or that amount of the Tax Gross-Up
will exceed the amount required under Section 11(A)
(“Overpayment”). In the event that the Accounting Firm
shall determine that an Underpayment or Overpayment has occurred,
either Exec
