Common use of Determination of Gross-Up Clause in Contracts

Determination of Gross-Up. (A) Except as provided in Section 13(b)(iii), the determination that a Payment is subject to an Excise Tax shall be made in writing by the principal certified public accounting firm then retained by the Company to audit its annual financial statements (the “Accounting Firm”). Such determination shall include the amount of the Gross-Up Payment and detailed computations thereof, including any assumptions used in such computations. Any determination by the Accounting Firm will be binding on the Company and Executive. (B) For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay Federal income taxes at the actual marginal rate of Federal income taxation in the calendar year in which the Gross-Up Payment is to be made. Such actual marginal rate shall take into account the loss of itemized deductions by Executive and shall also include Executive’s share of the hospital insurance portion of FICA and state and local income taxes at the actual marginal rate of taxation in the state and locality of Executive’s residence on the Termination Date, net of the maximum reduction in Federal income taxes that could be obtained from the deduction of such state and local taxes.