Limitation on Payments Clause Example with 260 Variations from Business Contracts
This page contains Limitation on Payments clauses in business contracts and legal agreements. An example clause is provided at the top of the page, followed by clauses with minor variations. You can view the text differences by selecting the "Show Differences" option.
Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute "parachute payments" within the meaning of Section 280G of the Code, and (ii) but for this Section 5, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive's benefits under Section 3 will be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to excis...e tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting "parachute payments" is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: reduction of cash payments; cancellation of Equity Awards granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; cancellation of accelerated vesting of Equity Awards; and reduction of employee benefits. In the event that acceleration of vesting of Equity Award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of Executive's Equity Awards. In no event will the Executive have any discretion with respect to the ordering of payment reductions. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 will be made in writing by the Company's independent public accountants immediately prior to a Change of Control or such other person or entity to which the parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon Executive and the Company. For purposes of making the calculations required by this Section 5, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. The Company will bear all costs the Firm may incur in connection with any calculations contemplated by this Section 5.View More
Variations of a "Limitation on Payments" Clause from Business Contracts
Limitation on Payments. In (a) If Executive receives, is provided or may receive or be provided any payment or benefit that constitutes a "parachute payment" (as defined in Section 280G(b)(2) of the event that Code), and the severance net after-tax amount of any such parachute payment is less than the net after-tax amount if the aggregate payments and other benefits provided for in this Agreement or otherwise payable to be made to Executive (i) constitute "parachute payments" within the meaning of were three times Exec...utive's "base amount" (as defined in Section 280G 280G(b)(3) of the Code, and (ii) but for this Section 5, would be subject to Code), less $1.00, then the excise tax imposed by Section 4999 aggregate of the Code, then amounts constituting the parachute payments shall be reduced to an amount equal to three times Executive's benefits under Section 3 base amount, less $1.00. For purposes of determining the "net after-tax amount," the Company will cause to be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking taken into account the all applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999, results in taxes (all computed at the receipt by Executive on an after-tax basis, highest applicable marginal rate, net of the greatest amount of benefits, notwithstanding that all or some portion maximum reduction in federal income taxes which could be obtained from a deduction of such benefits may be taxable under Section 4999 of the Code. state and local taxes). If a reduction pursuant to this Section 10 is to occur, (x) Executive will have no rights to any additional -7- payments and/or benefits that are being reduced, and (y) reduction in severance and other payments and/or benefits constituting "parachute payments" is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; cancellation payments, if any, which shall occur in reverse chronological order such that the cash payment owed on the latest date following the occurrence of Equity Awards granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; event triggering such excise tax will be the first cash payment to be reduced; (ii) cancellation of accelerated vesting of Equity Awards; equity awards other than stock options, if any; (iii) cancellation of accelerated vesting of stock options, if any; and (iv) reduction of employee benefits. other payments or benefits, if any, paid or provided to Executive, which shall occur in reverse chronological order such that the payment or benefit owed on the latest date following the occurrence of the event triggering such excise tax will be the first benefit to be reduced. In the event that acceleration of vesting of Equity Award compensation equity awards or stock options is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant grant. If two or more equity awards or stock options are granted on the same date, each award or stock option will be reduced on a pro-rata basis. Notwithstanding, any excise tax imposed will be solely the responsibility of Executive's Equity Awards. Executive. In no event will the shall Executive have any discretion with respect to the ordering of his payment reductions. (b) Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 10 will be made in writing by the Company's a nationally recognized firm of independent public accountants immediately prior to a Change of Control selected by the Company, the Company's legal counsel or such other person or entity to which the parties Parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon Executive and the Company. Company for all purposes. For purposes of making the calculations required by this Section 5, 10, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. Section 10. The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5. 10. View More
Limitation on Payments. In (a) If Executive receives, is provided or may receive or be provided any payment or benefit that constitutes a "parachute payment" (as defined in Section 280G(b)(2) of the event that Code), and the severance net after-tax amount of any such parachute payment is less than the net after-tax amount if the aggregate payments and other benefits provided for in this Agreement or otherwise payable to be made to Executive (i) constitute "parachute payments" within the meaning of were three times Exec...utive's "base amount" (as defined in Section 280G 280G(b)(3) of the Code, and (ii) but for this Section 5, would be subject to Code), less $1.00, then the excise tax imposed by Section 4999 aggregate of the Code, then amounts constituting the parachute payments shall be reduced to an amount equal to three times Executive's benefits under Section 3 base amount, less $1.00. For purposes of determining the "net after-tax amount," the Company will cause to be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking taken into account the all applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999, results in taxes (all computed at the receipt by Executive on an after-tax basis, highest applicable marginal rate, net of the greatest amount of benefits, notwithstanding that all or some portion maximum reduction in federal income taxes which could be obtained from a deduction of such benefits may be taxable under Section 4999 of the Code. state and local taxes). If a reduction pursuant to this Section 10 is to occur, (x) Executive will have no rights to any additional payments and/or benefits that are being reduced, and (y) reduction in severance and other payments and/or benefits constituting "parachute payments" is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; cancellation payments, if any, which shall occur in reverse chronological order such that the cash payment owed on the latest date following the occurrence of Equity Awards granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; event triggering such excise tax will be the first cash payment to be reduced; (ii) cancellation of accelerated vesting of Equity Awards; equity awards other than stock options, if any; (iii) cancellation of accelerated vesting of stock options, if any; and (iv) reduction of employee benefits. other payments or benefits, if any, paid or provided to Executive, which shall occur in reverse chronological order such that the payment or benefit owed on the latest date following the occurrence of the event triggering such excise tax will be the first benefit to be reduced. In the event that acceleration of vesting of Equity Award compensation equity awards or stock options is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant grant. If two or more equity awards or stock options are granted on the same date, each award or stock option will be reduced on a pro-rata basis. Notwithstanding, any excise tax imposed will be solely the responsibility of Executive's Equity Awards. Executive. In no event will the shall Executive have any discretion with respect to the ordering of his payment reductions. (b) Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 10 will be made in writing by the Company's a nationally recognized firm of independent public accountants immediately prior to a Change of Control selected by the Company, the Company's legal counsel or such other person or entity to which the parties Parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon Executive and the Company. Company for all purposes. For purposes of making the calculations required by this Section 5, 10, the Firm may make reasonable assumptions and -7- approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. Section 10. The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5. 10. View More
Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive you (i) constitute "parachute payments" within the meaning of Section 280G of the Code, Code and (ii) but for this Section 5, 20, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive's your severance benefits under Section 3 will be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such sev...erance benefits being subject to the excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state state, and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive you on an after-tax after- tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. If a reduction in the severance and other benefits constituting "parachute payments" is necessary so that no portion of such severance benefits are delivered is subject to the excise tax under Section 4999 of the Code, the reduction shall occur on a lesser extent, non-discretionary basis in such a way as to minimize the reduction will occur in the following order: reduction of cash payments; cancellation of Equity Awards granted "contingent economic value deliverable to you. Where one payment or benefit has the same value for this purpose and they are payable at different times, they will be reduced on a change pro rata basis. If, as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required, then an additional payment shall be made to you in ownership or control" an amount equal to the excess reduction within 60 days of the meaning date on which the amount of Code Section 280G; cancellation the excess reduction is determined, but not later than December 31 of accelerated vesting of Equity Awards; and the year in whichthe excess reduction of employee benefits. is determined. In the event that acceleration of vesting of Equity Award equity award compensation is Certain identified information has been excluded from this exhibit because it both (i) is notmaterial and (ii) would be competitively harmful if publicly disclosed. 6 to be reduced, such acceleration of vesting will shall be cancelled in the reverse order of the date of grant of Executive's Equity Awards. In no event will the Executive have any discretion with respect to the ordering of payment reductions. your equity awards. Unless the Company Corporation and Executive you otherwise agree in writing, any determination required under this Section 5 20 will be made in writing by an independent firm (without a pre-existing personal or business relationship with either you, the Company's independent public accountants Corporation or Parent or any affiliate of the foregoing) immediately prior to a the Change of in Control or such other person or entity to which the parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon Executive you and the Company. Corporation for all purposes. For purposes of making the calculations required by this Section 5, 20, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company Corporation and Executive you will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. Section 20. The Company Corporation will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5. 20. View More
Limitation on Payments. In (a) If Executive receives, is provided or may receive or be provided any payment or benefit that constitutes a "parachute payment" (as defined in Section 280G(b)(2) of the event that Code), and the severance net after-tax amount of any such parachute payment is less than the net after-tax amount if the aggregate payments and other benefits provided for in this Agreement or otherwise payable to be made to Executive (i) constitute "parachute payments" within the meaning of were three times Exec...utive's "base amount" (as defined in Section 280G 280G(b)(3) of the Code, and (ii) but for this Section 5, would be subject to Code), less $1.00, then the excise tax imposed by Section 4999 aggregate of the Code, then amounts constituting the parachute payments shall be reduced to an amount equal to three times Executive's benefits under Section 3 base amount, less $1.00. For purposes of determining the "net after-tax amount," the Company will cause to be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking taken into account the all applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999, results in taxes (all computed at the receipt by Executive on an after-tax basis, highest applicable marginal rate, net of the greatest amount of benefits, notwithstanding that all or some portion maximum reduction in federal income taxes which could be obtained from a deduction of such benefits may be taxable under Section 4999 of the Code. state and local taxes). If a reduction pursuant to this Section 10 is to occur, (x) Executive will have no rights to any additional payments and/or benefits that are being reduced, and (y) reduction in severance and other payments and/or benefits constituting "parachute payments" is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; cancellation payments, if any, which shall occur in reverse chronological order such that the cash payment owed on the latest date following the occurrence of Equity Awards granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; event triggering such excise tax will be the first cash payment to be reduced; (ii) cancellation of accelerated vesting of Equity Awards; equity awards other than stock options, if any; (iii) cancellation of accelerated vesting of stock options, if any; and (iv) reduction of employee benefits. other payments or benefits, if any, paid or provided to Executive, which shall occur in reverse chronological order such that the payment or benefit owed on the latest date following the occurrence of the event triggering such excise tax will be the first benefit to be reduced. In the event that acceleration of vesting of Equity Award compensation equity awards or stock options is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant grant. If two or more equity awards or stock options are granted on the same date, each award or stock option will be reduced on a pro-rata basis. Notwithstanding, any excise tax imposed will be solely the responsibility of Executive's Equity Awards. Executive. In no event will the shall Executive have any discretion with respect to the ordering of his payment reductions. -7- (b) Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 10 will be made in writing by the Company's a nationally recognized firm of independent public accountants immediately prior to a Change of Control selected by the Company, the Company's legal counsel or such other person or entity to which the parties Parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon Executive and the Company. Company for all purposes. For purposes of making the calculations required by this Section 5, 10, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. Section 10. The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5. 10. View More
Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive you (i) constitute "parachute ''parachute payments" within the meaning of Section 280G 2800 of the Code, Code and (ii) but for this Section 5, 19, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive's your severance benefits under Section 3 will be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no po...rtion of such severance benefits being subject to the excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive you on an after-tax after tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. If a reduction in the severance and other benefits constituting "parachute payments" is necessary so that no portion of such severance benefits are delivered is subject to the excise tax under Section 4999 of the Code, the reduction shall occur on a lesser extent, non-discretionary basis in such a way as to minimize the reduction will occur in the following order: reduction of cash payments; cancellation of Equity Awards granted "contingent economic value deliverable to you. Where one payment or benefit has the same value for this purpose and they are payable at different times, they will be reduced on a change pro rata basis. If, as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required, then an additional payment shall be made to you in ownership or control" an amount equal to the excess reduction within 60 days of the meaning date on which the amount of Code Section 280G; cancellation the excess reduction is determined, but not later than December 31 of accelerated vesting of Equity Awards; and the year in which the excess reduction of employee benefits. is determined. In the event that acceleration of vesting of Equity Award equity award compensation is to be reduced, such acceleration of vesting will shall be cancelled in the reverse order of the date of grant of Executive's Equity Awards. In no event will the Executive have any discretion with respect to the ordering of payment reductions. your equity awards. Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed. Unless the Company Corporation and Executive you otherwise agree in writing, any determination required under this Section 5 19 will be made in writing by the Company's an independent public accountants firm immediately prior to a the Change of in Control or such other person or entity to which the parties mutually agree (the "Firm"), "Firm "), whose determination will be conclusive and binding upon Executive you and the Company. Corporation for all purposes. For purposes of making the calculations required by this Section 5, 19, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company Corporation and Executive you will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. Section19. The Company Corporation will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5. 19. View More
Limitation on Payments. In the event (a) Reduction of Severance Benefits. If any payment or benefit that the severance and Executive would receive from the Company or any other benefits provided for party whether in this Agreement connection with the provisions herein or otherwise payable to Executive (the "Payment") would (i) constitute a "parachute payments" payment" within the meaning of Section 280G of the Code, Code and (ii) but for this Section 5, would sentence, be subject to the excise tax imposed by Section 49...99 of the Code, Code (the "Excise Tax"), then Executive's benefits under Section 3 such Payment will be either: (a) delivered in full, equal to the Best Results Amount. The "Best Results Amount" will be either (i) the full amount of such Payment or (b) delivered as to (ii) such lesser extent which amount as would result in no portion of such benefits the Payment being subject to excise tax under Section 4999 of the Code, Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local employment taxes, income taxes and the excise tax imposed by Section 4999, Excise Tax, results in the receipt by Executive Executive's receipt, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. greater amount. If a reduction in severance and other payments or benefits constituting "parachute payments" parachute payments is necessary so that benefits are delivered to a lesser extent, the Payment equals the Best Results Amount, reduction will occur in the following order: reduction of cash payments; cancellation of Equity Awards granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; cancellation of accelerated vesting of Equity Awards; and stock awards; reduction of employee benefits. In the event that acceleration of vesting of Equity Award stock award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of the Executive's Equity Awards. In no event will equity awards unless the Executive have elects in writing a different order for cancellation. The Executive will be solely responsible for the payment of all personal tax liability that is incurred as a result of the payments and benefits received under the Agreement, and the Executive will not be reimbursed by any discretion with respect member of the Company for any such payments. -4- (b) Determination of Excise Tax Liability. The Company will select a professional services firm to make all of the ordering of payment reductions. Unless determinations required to be made under these paragraphs relating to parachute payments. The Company will request that firm provide detailed supporting calculations both to the Company and the Executive otherwise agree in writing, any determination required under this Section 5 will be made in writing by the Company's independent public accountants immediately prior to a Change of Control or such other person or entity to the date on which the parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon event that triggers the Payment occurs if administratively feasible, or subsequent to such date if events occur that result in parachute payments to the Executive and the Company. at that time. For purposes of making the calculations required by this Section 5, under these paragraphs relating to parachute payments, the Firm firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations determinations concerning the application of Sections 280G and 4999 of the Code. The Company and the Executive will furnish to the Firm firm such information and documents as the Firm firm may reasonably request in order to make a determination under this Section. these paragraphs relating to parachute payments. The Company will bear all costs the Firm firm may reasonably incur in connection with any calculations contemplated by this Section 5. these paragraphs relating to parachute payments. Any such determination by the firm will be binding upon the Company and the Executive, and the Company will have no liability to the Executive for the determinations of the firm. View More
Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive you (i) constitute "parachute payments" within the meaning of Section 280G of the Code, Code and (ii) but for this Section 5, 19, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive's your severance benefits under Section 3 will be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such sev...erance benefits being subject to the excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state state, and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive you on an after-tax after- tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. If a reduction in the severance and other benefits constituting "parachute payments" is necessary so that no portion of such severance benefits are delivered is subject to the excise tax under Section 4999 of the Code, the reduction shall occur on a lesser extent, non-discretionary basis in such a way as to minimize the reduction will occur in the following order: reduction of cash payments; cancellation of Equity Awards granted "contingent economic value deliverable to you. Where one payment or benefit has the same value for this purpose and they are payable at different times, they will be reduced on a change pro rata basis. If, as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required, then an additional payment shall be made to 5Certain identified information has been excluded from this exhibit because it both (i) is notmaterial and (ii) would be competitively harmful if publicly disclosed. Exhibit 10.23you in ownership or control" an amount equal to the excess reduction within 60 days of the meaning date on which the amount of Code Section 280G; cancellation the excess reduction is determined, but not later than December 31 of accelerated vesting of Equity Awards; and the year in which the excess reduction of employee benefits. is determined. In the event that acceleration of vesting of Equity Award equity award compensation is to be reduced, such acceleration of vesting will shall be cancelled in the reverse order of the date of grant of Executive's Equity Awards. In no event will the Executive have any discretion with respect to the ordering of payment reductions. your equity awards. Unless the Company Corporation and Executive you otherwise agree in writing, any determination required under this Section 5 19 will be made in writing by the Company's an independent public accountants firm immediately prior to a the Change of in Control or such other person or entity to which the parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon Executive you and the Company. Corporation for all purposes. For purposes of making the calculations required by this Section 5, 19, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company Corporation and Executive you will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. Section19. The Company Corporation will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5. 19. View More
Limitation on Payments. In None of the payments provided by this Agreement are intended to be contingent upon a change in control event as described in Section 280G of the Code. However, in the unlikely event that the severance and other benefits provided for in this Agreement Company concludes, based upon the advice of counsel, that any payment or benefit hereunder or otherwise payable to Executive (i) constitute constitutes a "parachute payments" within the meaning of payment" (as defined in Section 280G 280G(b)(2) o...f the Code, Code), and (ii) but for the net after-tax amount of any such parachute payment is less than the net after-tax amount if the aggregate payments and benefits to be made to Executive were three times Executive's "base amount" (as defined in Section 280G(b)(3) of the Code), less $1.00, then the aggregate of the amounts constituting the parachute payments shall be reduced to an amount equal to three times Executive's base amount, less $1.00, and the following provisions of this Section 5, would 7 shall apply : -5- (a) The For purposes of determining the "net after-tax amount," the Company will cause to be subject to the excise tax imposed by Section 4999 of the Code, then Executive's benefits under Section 3 will be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking taken into account the all applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999, results in taxes (all computed at the receipt by Executive on an after-tax basis, highest applicable marginal rate, net of the greatest amount of benefits, notwithstanding that all or some portion maximum reduction in federal income taxes which could be obtained from a deduction of such benefits may be taxable under Section 4999 of the Code. state and local taxes). If a reduction pursuant to this Section 7 is to occur, Executive will have no rights to any additional payments and/or benefits that are being reduced, and (y) reduction in severance and other payments and/or benefits constituting "parachute payments" is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; cancellation payments, if any, which shall occur in reverse chronological order such that the cash payment owed on the latest date following the occurrence of Equity Awards granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; cancellation of accelerated vesting of Equity Awards; event triggering such excise tax will be the first cash payment to be reduced; and (ii) reduction of employee benefits. In other benefits, if any, paid to Executive, which shall occur in reverse chronological order such that the benefit owed on the latest date following the occurrence of the event that acceleration of vesting of Equity Award compensation is triggering such excise tax will be the first benefit to be reduced, such acceleration of vesting reduced. Notwithstanding, any excise tax imposed will be cancelled solely the responsibility of Executive. Notwithstanding the foregoing, to the extent the Company submits any payment or benefit otherwise payable to Executive under this Agreement or otherwise to the Company's stockholders for approval in accordance with Treasury Regulation Section 1.280G-1 Q&A 7, the and such payments and benefits will be treated in accordance with the results of such vote, the foregoing provisions shall not apply following such submission and such payments and benefits will be treated in accordance with the results of such vote, except that any reduction in, or waiver of, such payments or benefits required by such vote will be applied without any application of discretion by the Participant and in the reverse order of the date of grant of Executive's Equity Awards. prescribed by this Section 7. In no event will shall the Executive Participant have any discretion with respect to the ordering of Executive's payment reductions. (b) Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 7 will be made in writing by the Company's a nationally recognized firm of independent public accountants immediately prior to a Change of Control selected by the Company, the Company's legal counsel or such other person or entity to which the parties Parties mutually agree (the "Firm"), whose determination will be conclusive and binding upon Executive and the Company. Company for all purposes. For purposes of making the calculations required by this Section 5, 7, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5. 7. View More
Limitation on Payments. In the event that (a) Payments Limitation. If the severance and other benefits provided for in this Agreement or otherwise payable to Executive the Purchaser (i) constitute "parachute payments" within the meaning of Section section 280G of the Code, and (ii) but for this Section 5, would be subject to the excise tax imposed by Section section 4999 of the Code, Code (the "Excise Tax"), then Executive's the Purchaser's benefits under Section 3 will this Agreement shall be either: (a) (1) delivered... in full, or (b) (2) delivered as to such lesser extent which that would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, Excise Tax, results in the receipt by Executive the Purchaser on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section section 4999 of the Code. If a Any reduction in severance and other payments and/or benefits constituting "parachute payments" is necessary so that benefits are delivered to a lesser extent, reduction required by this Section 8 will occur in the following order: (1) reduction of cash payments; cancellation of Equity Awards granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; cancellation of accelerated vesting of Equity Awards; and (2) reduction of employee benefits. In vesting acceleration of equity awards; and (3) reduction of other benefits paid or provided to the event that Purchaser. If acceleration of vesting of Equity Award compensation equity awards is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of Executive's Equity Awards. for the Purchaser's equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. In no event will the Executive have Purchaser exercise any discretion with respect to the ordering of payment reductions. any reductions of payments or benefits under this Section 8. (b) Determination. Unless the Company and Executive the Purchaser otherwise agree in writing, any determination required under this Section 5 will 8 shall be made in writing by the Company's independent public accountants immediately prior to or a Change of Control or such other person or entity to which nationally recognized accounting firm selected by the parties mutually agree Company (the "Firm"), "Accountants"), whose determination will shall be conclusive and binding upon Executive the Purchaser and the Company. Company for all purposes. For purposes of making the calculations required by this Section 5, 8, the Firm Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections sections 280G and 4999 of the Code. The Company and Executive will the Purchaser shall furnish to the Firm Accountants such information and documents as the Firm Accountants may reasonably request in order to make a determination under this Section. Section 8. The Company will shall bear all costs the Firm Accountants may reasonably incur in connection with any calculations contemplated by this Section 5. 8. View More
Limitation on Payments. In the event that the severance payments and other benefits provided for in this Agreement the Plan or otherwise other payments and benefits payable or provided to Executive the Eligible Employee (i) constitute "parachute payments" within the meaning of Section 280G of the Code, Code and (ii) but for this Section 5, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive's the Eligible Employee's payments and benefits under Section 3 the Plan or other payments or b...enefits (the "280G Amounts") will be either: (a) delivered in full, full; or (b) delivered as to such lesser extent which that would result in no portion of such benefits the 280G Amounts being subject to the excise tax under Section 4999 of the Code, Code; whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive the Eligible Employee on an after-tax basis, of the greatest amount of benefits, 280G Amounts, notwithstanding that all or some portion of such benefits the 280G Amounts may be taxable under Section 4999 of the Code. If 5.1. Reduction Order. In the event that a reduction of 280G Amounts is made in severance and other benefits constituting "parachute payments" is necessary so that benefits are delivered to a lesser extent, accordance with Section 5, the reduction will occur occur, with respect to the 280G Amounts considered parachute payments within the meaning of Section 280G of the Code, in the following order: (a) reduction of cash payments; payments in reverse chronological order (that is, the cash payment owed on the latest date following the occurrence of the event triggering the excise tax will be the first cash payment to be reduced); (b) cancellation of Equity Awards equity awards that were granted "contingent on a change in ownership or control" within the meaning of Code Section 280G; cancellation (c) reduction of the accelerated vesting of Equity Awards; and reduction of employee benefits. In the event that acceleration of vesting of Equity Award compensation is to be reduced, such acceleration of vesting will be cancelled equity awards in the reverse order of the date of grant of Executive's Equity Awards. the awards (i.e., the vesting of the most recently granted equity awards will be cancelled first); and (d) reduction of employee benefits in reverse chronological order (i.e., the benefit owed on the latest date following the occurrence of the event triggering the excise tax will be the first benefit to be reduced). In no event will the Executive Eligible Employee have any discretion with respect to the ordering of payment reductions. 5.2. Nationally Recognized Firm Requirement. Unless the Company and Executive the Eligible Employee otherwise agree in writing, any determination required under this Section 5 will be made in writing by a nationally recognized accounting or valuation firm (the "Firm") selected by the Company's independent public accountants immediately prior to a Change of Control or such other person or entity to which the parties mutually agree (the "Firm"), Administrator, whose determination will be conclusive and binding upon Executive the Eligible Employee and the Company. Company for all purposes. For purposes of making the calculations required by this Section 5, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive the Eligible Employee will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. Section 5. The Company will bear all costs for payment of the Firm may incur Firm's services in connection with any calculations contemplated by this Section 5. View More
