First Data 2012 Annual Report Download - page 199

a result of the uncertainty in the application of Code Section 4999 at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to Section 8(iii) and the Eligible Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be paid by the Company to or for the benefit of
the Eligible Executive within five days of receipt of the Accounting Firm’s determination.
(iii) The Eligible Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than 10 business days after the Eligible Executive is informed in writing of such
claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be
paid. The Eligible Executive shall not pay such claim prior to the expiration of the 30-day period following the date
on which the Eligible Executive gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies the Eligible Executive in writing
prior to the expiration of such period that it desires to contest such claim, the Eligible Executive shall:
(a) give the Company any information reasonably requested by the Company relating to such claim;
(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; and
(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 Eligible 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 8(iii), 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 Eligible Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Eligible
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 further, that if
the Company directs the Eligible Executive to pay such claim and sue for a refund, the Company shall advance
the amount of such payment to the Eligible Executive on an interest-free basis and shall indemnify and hold the
Eligible 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 provided further, that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Eligible 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 and the
Eligible Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(iv) If, after the receipt by the Eligible Executive of an amount advanced by the Company pursuant to Section 8(iii), the
Eligible Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Eligible
Executive shall (subject to the Company’s complying with the requirements of Section 8(iii)) 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 Eligible Executive of an amount advanced by the Company pursuant to Section 8
(iii), a determination is made that the Eligible Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Eligible Executive in writing of its intent to contest such denial of refund
prior to the expiration of 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.