Common use of DRD Gross-Up; Extraordinary Dividends Clause in Contracts

DRD Gross-Up; Extraordinary Dividends. (a) If, from and after the first anniversary of the Closing Date, any amounts treated for U.S. federal income tax purposes as distributions with respect to the Shares, including any deemed distributions under Section 305(c) of the Code and including, for the avoidance of doubt, any Deemed Dividend Gross-Up Payment, are taken into account for U.S. federal income tax purposes by a DRD Holder for any taxable period in which such DRD Holder, directly or indirectly, held such Shares (such distributions, “Distributions”) and such Distributions are treated as distributions with respect to which such DRD Holder does not receive the benefit of the dividends received deduction under Section 243 of the Code solely as a result of the Company not having sufficient “earnings and profits” for U.S. federal income tax purposes (such portion of such Distributions, the “Non-DRD Amount”), then, at the Relevant Time, the Company shall pay to such DRD Holder an amount equal to the quotient of (i) the product of (A) the sum of (1) the highest federal marginal income tax rate applicable to corporations at such time and (2) 3.00% (such sum, the “Hypothetical Tax Rate”) and (B) any portion of the Non-DRD Amount for which Section 243 of the Code, as in effect at the time of such Distribution, would have provided a deduction at the time of such DRD Holder’s receipt of such Distribution for a corporation owning directly or indirectly the same vote and value as such DRD Holder with respect to the Company to the extent such Distribution would otherwise have been a dividend entitled to a dividends received deduction under Section 243 of the Code, as then in effect, divided by (ii) one minus the Hypothetical Tax Rate (such quotient being the “DRD Gross-Up Payment”). For the avoidance of doubt, no DRD Gross-Up Payment shall be payable with respect to any Non-DRD Amount (A) to the extent the Non-DRD Amount has previously been taken into account in making a payment under this Section 1.1, including to the extent any Extraordinary Deemed Dividend was previously included in the determination of a Deemed Dividend Gross-Up Payment, or (B) if such DRD Holder (or an Affiliate of such DRD Holder, if such Affiliate was a DRD Holder at the time of such Distribution) did not, directly or indirectly, hold Beneficial Ownership of such Shares at the time of such Distribution; provided that, for the avoidance of doubt, a DRD Holder that did not, directly or indirectly, hold Beneficial Ownership of such Shares at the time of such Distribution shall receive no payment pursuant to this Section 1.1 with respect to a Distribution that has already been taken into account in making a payment under this Section 1.1 (regardless of whether such payment was made to another Person).