Parachute Payments Clause Example from Business Contracts
This example Parachute Payments clause appears in
4 contracts
from
2 companies
Parachute Payments. 12.1 If any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise ("Payment") would (i) constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then such Payment will be equal to the Reduced Amount. The "Reduced Amount" shall be either (x) the largest portion of... the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (y) the largest portion, up to and including the total, of the Payment, whichever amount ((x) or (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive's receipt of the greatest economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. 12.2 The independent registered public accounting firm engaged by Company for general audit purposes as of the day prior to the effective date of the event described in Section 280G(b)(2)(A)(i) of the Code shall perform the foregoing calculations. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting such event, Company shall appoint a nationally recognized independent registered public accounting firm to make the determinations required hereunder. Company shall bear all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder. The independent registered public accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to Company and Executive within thirty (30) calendar days after the date on which Executive's right to a Payment is triggered (if requested at that time by Company or Executive) or such other time as reasonably requested by Company or Executive. Any good faith determinations of the independent registered public accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive. 12.3 Notwithstanding the above, prior to any reduction in payments and benefits under this Section 6, at Executive's request the Company agrees, if permissible under Section 280G of the Code and applicable law (and subject to any applicable requirements including any requirements that may be applicable to Executive), to solicit a vote of all eligible shareholders of the Company for approval of such amounts such that the compensation will not be subject to the Excise Tax as provided in Q&As 6 and 7 of Section 1.280G--1 of the Treasury Regulations or any superseding provision of such regulations. The Company agrees to take all reasonable steps, in good faith, to solicit such vote if so request.View More
