13Section 280G Clause Samples

The Section 280G clause addresses the tax implications of so-called "golden parachute" payments made to executives in connection with a change in control of a company. It typically outlines how the company and the executive will handle any excise taxes or loss of tax deductions that may arise if severance or other payments exceed certain thresholds set by the Internal Revenue Code. For example, the clause may specify whether payments will be reduced to avoid triggering penalties or if the executive will receive a gross-up to cover additional taxes. Its core function is to allocate the financial risks and responsibilities associated with potential excise taxes, ensuring both parties understand their obligations and minimizing unexpected tax liabilities.
13Section 280G. Notwithstanding any other provision of this Employment Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by Employer or its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Employment Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 5.13, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under clause (i) above is less than the amount under clause (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax. “Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes. ​
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13Section 280G. Notwithstanding anything to the contrary contained in this Agreement, to the extent that any of the payments and benefits provided for under this Agreement or any other agreement or arrangement between the Executive and the Bio-Techne (collectively, the “Payments”) constitute a “parachute payment” within the meaning of Section 280G of the Code and, but for this Section 7.13, would be subject to the excise tax imposed by Section 4999 of the Code, then the Payments shall be payable either (i) in full or (ii) as to such lesser amount which would result in no portion of such Payments being subject to 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 Executive’s receipt on an after-tax basis, of the greatest amount of economic benefits under this Agreement, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Executive and Bio-Techne otherwise agree in writing, any determination required under this Section 7.13 shall be made in writing by Bio-Techne’s independent public accountants (the “Accountants”), whose reasonable determination shall be conclusive and binding upon Executive and Bio-Techne for all purposes. For purposes of making the calculations required by this Section 7.13, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Sections 280G and 4999 of the Code. Executive and Bio-Techne shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 7.13. The Accountants will provide its calculations, together with detailed supporting documentation, to the Company and Executive as soon as practicable following its engagement. If a reduction in Payments is required by this provision and none of the Payments constitute “non-qualified deferred compensation” subject to Code Section 409A, then the reduction will occur in the manner Executive elects in writing prior to the date of payment. If any Payment constitutes “non-qualified deferred compensation” subject to Code Section 409A or if Executive fails to elect an order, then the Payments to be reduced will be determined in a manner which has the least economic cost to ...
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13Section 280G. Notwithstanding any other provision of this Employment Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by Employer or its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Employment Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 5.13, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are limited to the extent necessary ​
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13Section 280G. Notwithstanding any other provision of this Employment Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by Employer or its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Employment Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 5.13, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise
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13Section 280G. Notwithstanding any other provision of this Employment Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by Employer or its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Employment Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the
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13Section 280G. The Company shall, at least three (3) days prior to the Closing Date, solicit from each individual who is, as of the Closing Date, a “disqualified individual” (as defined in Section 280G(c) of the Code), a written waiver of his or her right to any “parachute payment” (as defined in Section 280G(b)(2) of the Code) (a “Waived Benefit”) solely to the extent required such that all remaining payments or benefits due to such disqualified individual that are “contingent” (within the meaning of Section 280G of the Code) on the execution or delivery of this Agreement or the consummation of the transactions contemplated by this Agreement (either alone or in conjunction with any other event) not be deemed to be a parachute payment that would not be deductible under Section 280G of the Code. Prior to the Closing Date, the Company will provide to Buyer evidence that it submitted to a stockholder vote, in a manner intended to be compliant with Section 280G(b)(5)(B) of the Code, the right of any such disqualified individual to receive the Waived Benefit and that either (i) the requisite number of stockholder votes was obtained or (ii) the requisite number of votes was not obtained and no Waived Benefit have not been and will not be made or provided. Notwithstanding the foregoing, to the extent that any arrangement is entered into by Buyer or any of its Affiliates and a disqualified individual in connection with the transactions contemplated by this Agreement before the Closing Date (or is contemplated or proposed prior to the Closing Date to be entered into following the Closing Date) (the “Buyer Arrangements”), Buyer shall provide a copy of such arrangement to the Company and the Sellers at least ten (10) days before the Closing Date. Buyer shall also cooperate with the Company and the Sellers in good faith to calculate or determine the value (for the purposes of Section 280G of the Code) of any payments or benefits granted or contemplated in the Buyer ​ ​ Arrangements that may be paid or granted in connection with the transactions contemplated by this Agreement that could constitute a “parachute payment” under Section 280G of the Code. In any event, the Company’s failure to include the Buyer Arrangements in the stockholder voting materials described in this Section 7.13 as a result of ▇▇▇▇▇’s breach of the covenants set forth in this Section 7.13 will not result in a breach of the Company’s covenants set forth in this Section 7.13. Not less than five (5) days prior to ...
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Related to 13Section 280G

  • Section 280G Notwithstanding anything contained in this Agreement to the contrary to the extent that any of the payments and benefits provided for under this Agreement together with any payments or benefits under any other agreement or arrangement between the Company and the Employee (collectively, the “Payments”) would (a) constitute “parachute payments” within the meaning of Section 280G of the Code and (b) but for this Section 14 would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then such Payments shall be either: (i) delivered in full, or (ii) reduced (but not below zero) to the maximum amount that could be paid to the Employee without giving rise to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the Excise Tax (and any equivalent state or local excise taxes), results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the Payments, notwithstanding that all or some portion of such Payments may be subject to the Excise Tax. Unless the Company and the Employee otherwise agree, any determination required under this Section 14 will be made in writing by independent public accountants (the “Accountants”) chosen by the Company, whose determination will be conclusive and binding (absent manifest error) upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 14, the Accountants 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 Employee agree to furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 14. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 14. Any reduction in Payments required by this provision shall occur in the following order (and in a manner compliant with Section 409A of the Code): (1) reduction of cash payments, beginning with payments scheduled to occur soonest; (2) reduction of vesting acceleration of equity awards (in reverse order of the date of the grant); and (3) reduction of other benefits paid or provided to Employee.

  • Section 280G of the Code Notwithstanding anything contained in this Agreement to the contrary, if the Executive would receive (i) any payment, deemed payment or other benefit as a result of the operation of Section 8 or 9 hereof that, together with any other payment, deemed payment or other benefit the Executive may receive under any other plan, program, policy or arrangement (collectively with the payments under Section 8 and 9 hereof, the “Covered Payments”), would constitute an “excess parachute payment” under section 280G of the Code that would be or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Code or any similar tax that may hereafter be imposed, and (ii) a greater net after-tax benefit by limiting the Covered Payments so that the portion thereof that are parachute payments do not exceed the maximum amount of such parachute payments that could be paid to the Employee without Employee’s being subject to any Excise Tax (the “Safe Harbor Amount”), then the Covered Payments to the Executive shall be reduced (but not below zero) so that the aggregate amount of parachute payments that the Executive receives does not exceed the Safe Harbor Amount. In the event that the Executive receives reduced payments and benefits hereunder, such payments and benefits shall be reduced in connection with the application of the Safe Harbor Amount in the following manner: first, the Executive’s Severance Payment shall be reduced, followed by, to the extent necessary and in order, (i) the Target Cash Bonus; (ii) any the continuation of medical benefits, (iii) the Unvested RSU Bonus Shares and (iv) the Accrued Obligations. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax, such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of a public accounting firm appointed by the Company prior to the Change in Control or tax counsel selected by such accounting firm (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the allocable portion of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.