Common use of Potential Gross-Up Clause in Contracts

Potential Gross-Up. (a) In the event that the Payments would be subject to the Excise Tax and that Section 1.1 does not apply because the amount of the Payments exceeds 110% of the Parachute Payment Threshold as provided therein, then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) equal to an amount such that after payment by the Executive of all taxes, interest, penalties, additions to tax and costs imposed or incurred with respect to the Gross-Up Payment (including, without limitation, any income and excise taxes imposed upon the Gross-Up Payment), the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon such Payments. This provision is intended to put the Executive in the same position as the Executive would have been had no Excise Tax been imposed upon or incurred as a result of any Payments.