US Airways 2006 Annual Report Download - page 261

(b) take such action in connection with contesting such claim as the Company 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 the Company,
(c) cooperate with the Company in good faith in order effectively to contest such claim,
(d) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company 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 Executive harmless,
on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of this Section 7.3, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo 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 Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or 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 the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder;
whereas the Executive shall be entitled to settle or contest, as the case may be, any other issued raised by the Internal Revenue Service or any other taxing
authority.
7.4 Refunds. If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 7.3, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 7.3) promptly pay to
the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 7.3, a determination is made that the Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty
(30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to
the extent thereof, the amount of Gross-Up Payment required to be paid. Notwithstanding any other provision of this Section 7.4, the Company shall not make
any advance or forgive any amount if such action would be deemed to be a prohibited loan by the Company in violation of any provision of the Sarbanes-
Oxley Act of 2002 or any other law or regulation.
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