Common use of Gross-Up Amount Clause in Contracts

Gross-Up Amount. In the event Executive incurs (through withholding or otherwise) any excise tax ("Excise Tax") under Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), on "excess parachute payments" made by the Company in connection with the consummation of a change in control transaction, the Company shall pay Executive, prior to the time any such Excise Tax is payable, an additional amount (the "Gross Up Amount") which, after the imposition of all income and excise taxes thereon, is sufficient to put Executive in the same after-tax position as Executive would have been had Executive not been subject to any such Excise Tax; provided however, that if Executive would receive parachute payments (as defined in Section 280G of the Code) in connection with the consummation of a change in control transaction, and the net after-tax benefit of receiving such parachute payments plus the Gross Up Amount would be less than 125% of the net-after-tax benefit that Executive would receive if the amount of such parachute payments were reduced so that no Excise Tax were owing, then no Gross Up Amount shall be paid to Executive and the cash portion of any parachute payments made to Executive shall be reduced so that no Excise Tax shall be owed. For purposes of this Section, the net-after-tax benefit of payments shall be determined by assuming that Executive is subject to the highest federal marginal tax rate, the highest marginal rate of taxation in the state and locality of Executive's primary place of business and by assuming that state and local tax payments are deductible by Executive for federal income tax purposes at the highest marginal rate. In the event the Internal Revenue Service adjusts the computation of the Company under this Section 8, the Company shall reimburse Executive or Executive shall return payment to the Company to the extent necessary to achieve the purpose of this Section 8.

Gross-Up Amount. (a) In addition to the event Executive incurs Change in Control Payment described in Section 1 above, Bancorp shall pay to Employee an amount (through withholding or otherwisethe "Gross-Up Amount") any equal to the excise tax ("Excise Tax") under Section 4999 of the Internal Revenue Code, if any, incurred by Employee on the payments and benefits owed under this Agreement, and/or under all other plans, agreements or understandings between Employee and Bancorp (collectively "Golden Parachute Payments") constituting excess parachute payments under Code Section 280G, plus all excise taxes and federal, state and local income taxes incurred by Employee with respect to receipt of 1986the Gross-Up Amount. The parties intend that the Gross-Up Amount be in an amount such that after payment by the Employee of all taxes (including income taxes, as amended (the "Code"excise taxes under Code Section 4999 interest and penalties), imposed upon the Gross-Up Amount, the Employee will retain a portion of the Gross-Up Amount equal to the Code Section 4999 excise tax imposed on the Golden Parachute Payments. Attached hereto as Exhibit A is an example of the computation of the Gross-Up Amount. (b) All determinations required to be made under this Section 3, including whether a Gross-Up Payment is required and the amount of any Gross-Up Amount, shall be made by the Accounting Firm, which shall provide detailed support calculations to Bancorp and Employee. In computing taxes, the Accounting Firm shall use the highest marginal federal, state and local income tax rates applicable to the Employee and shall assume the full deductibility of state and local income taxes for purposes of computing federal income tax liability, unless the Employee demonstrates that the will not in fact be entitled to such a deduction for the year of payment. (c) The Gross-Up Amount, computed assuming all of the Golden Parachute Payments constitute "excess parachute payments" made as defined in Code Section 280G, shall be paid to the Employee with the Change in Control Payment (or as soon thereafter as is practicable) unless Bancorp at the same time as the payment of the Change in Control Payment provides the Employee with an opinion of the Accounting Firm that Employee will not incur an excise tax on part or all of the Golden Parachute Payments. Any such opinion shall be based upon the proposed regulations under Code Sections 280G and 4999 or substantial authority within the meaning of Code Section 6661. If such opinion applies only to part of the Golden Parachute Payment, Bancorp shall pay Employee the Gross-Up Amount with respect to that part of the Golden Parachute Payment not covered by the Company opinion. (d) The Gross-Up Amount shall be subject to adjustment so as to avoid either an overpayment or underpayment of the Gross-Up Amount to 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 Accounting Firm hereunder, it is possible that Gross-Up Amounts which should have been paid by Bancorp will not have been paid ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Bancorp exhausts its remedies pursuant to Section 3(e) below and the Employee thereafter is required to make a payment of any additional excise tax under Code Section 4999, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Bancorp to or for the benefit of the Employee. (e) The Employee shall notify Bancorp in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Bancorp of an addition Gross-Up Amount. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Employee knows of such claim and shall apprise Bancorp of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which he gives such notice to Bancorp (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Bancorp notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: (1) Give Bancorp any information reasonably requested by Bancorp relating to such claim, (2) Take such action in connection with contesting such claim as Bancorp 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 Bancorp, (3) Cooperate with Bancorp in good faith in order effectively to contest such claim, and (4) Permit Bancorp to participate in any proceedings relating to such claim; provided, however, that Bancorp 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 consummation of a change in control transactionEmployee harmless, the Company shall pay Executive, prior to the time any such Excise Tax is payable, on an additional amount (the "Gross Up Amount") which, after the imposition of all income and excise taxes thereon, is sufficient to put Executive in the same after-tax position basis, for any tax (including income taxes, excise tax under Code Section 4999, interest and penalties with respect thereto), imposed as Executive would have been had Executive not been subject a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 3(e), Bancorp shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego 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 the Employee to pay the tax claimed and ▇▇▇ for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such Excise Taxcontest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Bancorp shall determine; provided provided, however, that if Executive would receive parachute payments (as defined in Section 280G Bancorp directs the Employee to pay such claim and ▇▇▇ for a refund, Bancorp shall advance the amount of such payment to the Code) in connection with Employee, on an interest-free basis and shall indemnify and hold the consummation of a change in control transactionEmployee harmless, and the net on an after-tax benefit basis, from any tax (including income taxes, excise taxes under Code Section 4999, interest and 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 receiving the statute of limitations relating to payment of taxes for the taxable year of the Employee with respect to which such parachute payments plus contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Bancorp's control of the Gross contest shall be limited to issues with respect to which a Gross-Up Amount would be less than 125% payable hereunder and the Employee 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. (f) If, after the receipt by the Employee of an amount paid or advanced by Bancorp pursuant to Section 3(c) or Section 3(e), the net-after-tax benefit that Executive would Employee becomes entitled to receive if from any taxing authority a refund with respect to such amount advanced, the Employee shall promptly pay to Bancorp the amount of such parachute payments were reduced so refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by Bancorp pursuant to Section 3(e), a determination is made that no Excise Tax were owingthe Employee shall not be entitled to any refund with respect to such claim and Bancorp does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then no Gross Up Amount such advance shall be paid forgiven and shall not be required to Executive be repaid and the cash portion amount of any parachute payments made to Executive such advance shall be reduced so that no Excise Tax shall be owed. For purposes of this Sectionoffset, the net-after-tax benefit of payments shall be determined by assuming that Executive is subject to the highest federal marginal tax rate, the highest marginal rate of taxation in the state and locality of Executive's primary place of business and by assuming that state and local tax payments are deductible by Executive for federal income tax purposes at the highest marginal rate. In the event the Internal Revenue Service adjusts the computation of the Company under this Section 8, the Company shall reimburse Executive or Executive shall return payment to the Company to the extent necessary thereof, the amount of Gross-Up Amount required to achieve the purpose of this Section 8be paid.

Gross-Up Amount. (a) In addition to the event Executive incurs Change in Control Payment described in Section 1 above, Bancorp shall pay to Employee an amount (through withholding or otherwisethe "Gross-Up Amount") any equal to the excise tax ("Excise Tax") under Section 4999 of the Internal Revenue Code, if any, incurred by Employee on the payments and benefits owed under this Agreement, and/or under all other plans, agreements or understandings between Employee and Bancorp (collectively "Golden Parachute Payments") constituting excess parachute payments under Code Section 280G, plus all excise taxes and federal, state and local income taxes EXHIBIT 10.25 incurred by Employee with respect to receipt of 1986the Gross-Up Amount. The parties intend that the Gross-Up Amount be in an amount such that after payment by the Employee of all taxes (including income taxes, as amended (the "Code"excise taxes under Code Section 4999 interest and penalties), imposed upon the Gross-Up Amount, the Employee will retain a portion of the Gross-Up Amount equal to the Code Section 4999 excise tax imposed on the Golden Parachute Payments. Attached hereto as Exhibit A is an example of the computation of the Gross-Up Amount. (b) All determinations required to be made under this Section 3, including whether a Gross-Up Payment is required and the amount of any Gross-Up Amount, shall be made by the Accounting Firm, which shall provide detailed support calculations to Bancorp and Employee. In computing taxes, the Accounting Firm shall use the highest marginal federal, state and local income tax rates applicable to the Employee and shall assume the full deductibility of state and local income taxes for purposes of computing federal income tax liability, unless the Employee demonstrates that the will not in fact be entitled to such a deduction for the year of payment. (c) The Gross-Up Amount, computed assuming all of the Golden Parachute Payments constitute "excess parachute payments" made as defined in Code Section 280G, shall be paid to the Employee with the Change in Control Payment (or as soon thereafter as is practicable) unless Bancorp at the same time as the payment of the Change in Control Payment provides the Employee with an opinion of the Accounting Firm that Employee will not incur an excise tax on part or all of the Golden Parachute Payments. Any such opinion shall be based upon the proposed regulations under Code Sections 280G and 4999 or substantial authority within the meaning of Code Section 6661. If such opinion applies only to part of the Golden Parachute Payment, Bancorp shall pay Employee the Gross-Up Amount with respect to that part of the Golden Parachute Payment not covered by the Company opinion. (d) The Gross-Up Amount shall be subject to adjustment so as to avoid either an overpayment or underpayment of the Gross-Up Amount to 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 Accounting Firm hereunder, it is possible that Gross-Up Amounts which should have been paid by Bancorp will not have been paid ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Bancorp exhausts its remedies pursuant to Section 3(e) below and the Employee thereafter is required to make a payment of any additional excise tax under Code Section 4999, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Bancorp to or for the benefit of the Employee. (e) The Employee shall notify Bancorp in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Bancorp of an addition Gross-Up Amount. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Employee knows of such claim and shall apprise Bancorp of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which he gives such notice to Bancorp (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If EXHIBIT 10.25 Bancorp notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: (1) Give Bancorp any information reasonably requested by Bancorp relating to such claim, (2) Take such action in connection with contesting such claim as Bancorp 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 Bancorp, (3) Cooperate with Bancorp in good faith in order effectively to contest such claim, and (4) Permit Bancorp to participate in any proceedings relating to such claim; provided, however, that Bancorp 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 consummation of a change in control transactionEmployee harmless, the Company shall pay Executive, prior to the time any such Excise Tax is payable, on an additional amount (the "Gross Up Amount") which, after the imposition of all income and excise taxes thereon, is sufficient to put Executive in the same after-tax position basis, for any tax (including income taxes, excise tax under Code Section 4999, interest and penalties with respect thereto), imposed as Executive would have been had Executive not been subject a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 3(e), Bancorp shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego 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 the Employee to pay the tax claimed and ▇▇▇ for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such Excise Taxcontest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Bancorp shall determine; provided provided, however, that if Executive would receive parachute payments (as defined in Section 280G Bancorp directs the Employee to pay such claim and ▇▇▇ for a refund, Bancorp shall advance the amount of such payment to the Code) in connection with Employee, on an interest-free basis and shall indemnify and hold the consummation of a change in control transactionEmployee harmless, and the net on an after-tax benefit basis, from any tax (including income taxes, excise taxes under Code Section 4999, interest and 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 receiving the statute of limitations relating to payment of taxes for the taxable year of the Employee with respect to which such parachute payments plus contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Bancorp's control of the Gross contest shall be limited to issues with respect to which a Gross-Up Amount would be less than 125% payable hereunder and the Employee 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. (f) If, after the receipt by the Employee of an amount paid or advanced by Bancorp pursuant to Section 3(c) or Section 3(e), the net-after-tax benefit that Executive would Employee becomes entitled to receive if from any taxing authority a refund with respect to such amount advanced, the Employee shall promptly pay to Bancorp the amount of such parachute payments were reduced so refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by Bancorp pursuant to Section 3(e), a determination is made that no Excise Tax were owingthe Employee shall not be entitled to any refund with respect to such claim and Bancorp does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then no Gross Up Amount such advance shall be paid forgiven and shall not be required to Executive be repaid and the cash portion amount of any parachute payments made to Executive such advance shall be reduced so that no Excise Tax shall be owed. For purposes of this Sectionoffset, the net-after-tax benefit of payments shall be determined by assuming that Executive is subject to the highest federal marginal tax rate, the highest marginal rate of taxation in the state and locality of Executive's primary place of business and by assuming that state and local tax payments are deductible by Executive for federal income tax purposes at the highest marginal rate. In the event the Internal Revenue Service adjusts the computation of the Company under this Section 8, the Company shall reimburse Executive or Executive shall return payment to the Company to the extent necessary thereof, the amount of Gross-Up Amount required to achieve the purpose of this Section 8be paid.