Section 409A Grossup Clause Samples

Section 409A Grossup. The parties neither intend nor expect the payments under this Agreement to be subject to taxation under Section 409A(a)(1)(B) of the Internal Revenue Code of 1986, as amended (or any comparable successor section, referred to collectively as the “Section 409A Tax”), but the parties recognize that the application of the Section 409A Tax is uncertain at this time. If, however, Employee and his tax advisors conclude that the Section 409A Tax will apply, Blackbaud agrees to pay Employee an additional cash amount (a “Grossup Payment”) when making, or being deemed to make, any compensatory payment subject to the Section 409A Tax or as soon thereafter as Employee notifies Blackbaud that additional payments are due. This Grossup Payment shall be sufficient such that the net amount retained by Employee after deduction of any additional taxes imposed by the Section 409A Tax, and any federal, state and local income tax, employment tax and excise tax imposed upon the Grossup Payment, shall be equal to the value of the compensatory payment subject to the Section 409A Tax before the application of such tax. Employee shall, at Blackbaud’s expense, provide or approve a tax analysis to support the gross-up payments.