Famous Footwear 2010 Annual Report Download - page 114

paid by the Company. The Company shall make payment of such reimbursements from time to time, but in no event later than the last day of the calendar
year following the calendar year in which such expenses are incurred, provided Employee timely submits reasonable document of such expenses. If the event
Employee is not the prevailing party in any such contest, Employee shall pay back any reimbursements made by the Company hereunder within 30 days of
final disposition of such contest.
Section 7. Release
Notwithstanding anything to the contrary stated in this Agreement, no benefits will be paid pursuant to Section 4 except under Section 4.1(a), 4.2(a)
or 4.3 prior to execution by Employee of a release of the Company substantially in the form attached as Exhibit A, with such changes as may be made by the
Company in its sole discretion in order to comply with and stay current with applicable laws and regulations. Unless Employee executes such release and
returns it to the Company within forty-five (45) days of his termination of employment, all benefits except under Section 4.1(a), 4.2(a) and 4.3 shall be
forfeited.
Section 8. Certain Additional Payments
8.1 Notwithstanding anything to the contrary contained herein and except as set forth below, in the event it shall be determined that any
payment or distribution by or on behalf of the Company to or for the benefit of Employee (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 8) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Employee 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 Employee shall be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Employee 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, Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. Notwithstanding the foregoing provisions of this Section 8.1, if it shall be determined that Employee is entitled to a Gross-Up Payment, but that
the Payments do not exceed 110% of the greatest amount (the “Reduced Amount”) that could be paid to Employee such that the receipt of Payments will not
give rise to any Excise Tax, then no Gross-Up Payment shall be made to Employee and the Payments, in the aggregate, shall be reduced to the Reduced
Amount.
8.2 Subject to the provisions of Section 8.3, all determinations required to be made under this Section 8, 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 Ernst & Young LLP or such other certified public accounting firm, human resources consulting firm, or other consulting firm in the business of
performing such calculations as may be designated by Employee with the consent of the Company, which consent shall not be unreasonably withheld (the
“Consulting Firm”), which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the
receipt of notice from Employee that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Consulting Firm is
serving as accountant or auditor for the individual, entity or group effecting the Change of Control, Employee, with the consent of the Company, which
consent shall not be unreasonably withheld, shall appoint another nationally recognized accounting firm, human resources consulting firm, or other
consulting firm in the business of performing such calculations to make the determinations required hereunder (which such firm shall then be referred to as
the Consulting Firm hereunder). All fees and expenses of the Consulting Firm shall be borne solely by the Company. Any Gross- Up Payment, as
determined pursuant to this Section 8, shall be paid by the Company to Employee no later than two and one-half months following the Termination
Date. Any determination by the Consulting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the Consulting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 8.3 and Employee thereafter is required to make a payment of any Excise Tax, the Consulting
Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the
benefit of Employee within two and one-half months after the date the Company exhausts such remedies.
8.3 Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than thirty (30) days after
Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to
be paid. Employee shall not pay such claim prior to the expiration of the thirty (30)-day period following the date on which Employee gives such notice to
the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Employee in
writing prior to the expiration of such period that it desires to contest such claim, Employee shall:
(a) give the Company any information reasonably requested by the Company relating to such claim;
(b) take such action in connection with contesting such claim as 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 reasonably selected by the Company;
(c) cooperate with the Company in good faith in order to effectively contest such claim; and
(d) permit the Company to participate in any proceedings relating to such claim;
provided, however, that 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 Employee 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 8.3, the Company shall control all proceedings taken in connection with such contest and, at 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 its sole option, either direct
Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Employee agrees to prosecute such contest to a