Common use of Requirement of Gross-Up Payment Clause in Contracts

Requirement of Gross-Up Payment. If the Subject Payments will be subject to the tax imposed by Section 4999 of the Code (the “Excise Tax”), the Corporation shall pay to or for the benefit of the Executive at the time specified in Article 12.4 below an additional amount (the “Gross-Up Payment”), such that the net amount retained by the Executive, after deduction of any Excise Tax on the Subject Payments and any U.S. federal, state, and local income or payroll tax upon the Gross-Up Payment, but before deduction for any U.S. federal, state, and local income or payroll tax on the Subject Payments, shall be equal to the Subject Payments. For purposes of calculating the Gross-Up Payment, the Executive shall be deemed to pay income taxes at the highest applicable marginal rate of federal, state, or local income taxation for the calendar year in which the Gross-Up Payment is to be made.