ServiceMagic 2010 Annual Report Download - page 133

computed, that Executive would retain after payment of all taxes (including without limitation any federal, state or local income taxes, the Excise
Tax or any other excise taxes, any medicare or other employment taxes, and any other taxes) imposed on such Contingent Compensation
Payments in the year or years in which payable; and (y) the amount of such taxes shall be computed at the rates in effect under the applicable tax
laws in the year in which the 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any
Contingent Compensation Payment is expected to be paid following the 280G Change in Control, and in the case of any income taxes, by using
the maximum combined federal, state and (if applicable) local income tax rates then in effect under such laws.
(d) A determination as to whether any Excise Tax is payable with respect to Executive’s Contingent Compensation Payments and if so, as
to the amount thereof, and a determination as to whether any reduction in Executive’s Contingent Compensation Payments is required pursuant
to the provisions of Sections 11A(a) and 11A(c) above, and if so, as to the amount of the reduction so required, shall be made by no later than 15
days prior to the closing of the transaction or the occurrence of the event that constitutes the 280G Change in Control. Such determinations, and
the assumptions to be utilized in arriving at such determinations, shall be made by an independent auditor (the “Auditor”) jointly selected by
Executive and the Company, all of whose fees and expenses shall be borne and directly paid solely by the Company. The Auditor shall be a
nationally recognized public accounting firm which has not, during the two years preceding the date of its selection, acted in any way on behalf
of the Company or any of its affiliates. If Executive and the Company cannot agree on the firm to serve as the Auditor, then Executive and the
Company shall each select one accounting firm and those two firms shall jointly select the accounting firm to serve as the Auditor. The Auditor
shall provide a written report of its determinations, including detailed supporting calculations, both to Executive and to the Company. . The
determinations made by the Auditor pursuant to this Section 11A(d) shall be binding upon Executive and the Company.
(e) For purposes of the foregoing, the following terms shall have the following respective meanings:
(i) “280G Change in Control” shall mean a change in the ownership or effective control of the Company or in the
ownership of a substantial portion of the assets of the Company, as determined in accordance with section 280G(b)(2) of the Code and the
regulations issued thereunder.
(ii) “Contingent Compensation Payment” shall mean any payment or benefit in the nature of compensation that is to be
paid or provided to Executive or for his benefit in connection with a 280G Change in Control (whether under this Agreement or otherwise,
including by the entity, or by any affiliate of the entity, whose acquisition of the stock of the Company or its assets constitutes the Change in
Control) if Executive is a “disqualified individual” (as defined in section 280G(c) of the Code) at the time of the 280G Change in Control, to the
extent that such payment or benefit is “contingent” on the 280G Change in Control within the meaning of section 280G(b)(2)(A)(i) of the Code
and the regulations issued thereunder.
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