280G Cutback. Notwithstanding any other provision of this Agreement to the contrary, if payments made or benefits provided pursuant to Section 6 herein are considered “parachute payments” under Code Section 280G, then such parachute payments plus any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reduction, the net after tax benefit to Executive shall exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a “parachute payment” within the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive’s employment), less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required to be reduced in accordance with this Section 10(i) shall be made at the Company’s expense by a nationally recognized certified public accounting firm as may be designated by the Company and reasonably acceptable to Executive prior to a Change in Control (the “Accounting Firm”). In the event of any mistaken underpayment or overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, but only to the extent any such refund would result in (i) no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code and (ii) a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, with interest at the applicable Federal rate provided for in Code Section 7872(f)(2). Any reduction in payments required by this Section 10(i) shall occur in the following order: (1) any cash severance, (2) any other cash amount payable to Executive, (3) any benefit valued as a “parachute payment,” and (4) the acceleration of vesting of any equity-based awards.
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Samples: Employment Agreement (SMART Global Holdings, Inc.), Employment Agreement (SMART Global Holdings, Inc.), Employment Agreement (SMART Global Holdings, Inc.)
280G Cutback. Notwithstanding any other provision provisions of this Agreement to the contrary, if payments made in the event that the Company determines in good faith that any payment or benefits provided benefit received or to be received by Executive pursuant to Section 6 herein are considered “parachute payments” under Code Section 280Gthis Agreement, then or otherwise (all such parachute payments plus any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reduction, the net after tax benefit to Executive shall exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a “parachute payment” within the meaning of Code Section 280Gbenefits, less (iii) the amount of federal including, without limitation, salary and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive’s employment)bonus payments, less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required to be reduced in accordance with this Section 10(i) shall be made at the Company’s expense by a nationally recognized certified public accounting firm as may be designated by the Company and reasonably acceptable to Executive prior to a Change in Control (being hereinafter called the “Accounting FirmTotal Payments”). In the event of any mistaken underpayment or overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith ) would be paid to Executive or refunded to the Company, as the case may be, but only to the extent any such refund would result in (i) no portion of such payments being subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), by reason of being considered “contingent on a change in ownership or control” of the Company within the meaning of Section 280G of the Code, then such Total Payments shall be reduced to the extent necessary so that the Total Payments will be less than three times Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code), unless the amount of such reduction would equal or exceed one-hundred percent (100%) of the excise taxes that would be imposed by Section 4999 of the Code on such payments and benefits. The reduction of the Total Payments shall apply as follows, unless otherwise agreed and such agreement is in compliance with Section 409A of the Code: (i) first, any cash severance payments due under the Agreement shall be reduced, with the last such payment due first forfeited and reduced, and sequentially thereafter working from the next last payment, and (ii) a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federalsecond, state and local income and employment taxes, with interest at the applicable Federal rate provided for in Code Section 7872(f)(2). Any reduction in payments required by this Section 10(i) shall occur in the following order: (1) any cash severance, (2) any other cash amount payable to Executive, (3) any benefit valued as a “parachute payment,” and (4) the acceleration of vesting of any equity-based awardsequity shall be deferred with the tranche that would vest last (without any such acceleration) first deferred. Notwithstanding the foregoing, to the extent satisfaction of the shareholder approval requirements of Section 280G(b)(5)(B) and Treasury Regulation Section 1.280G-1 Q&A7 (the “Shareholder Approval Exception”) would result in the Total Payments being excluded from tax imposed by Section 4999 of the Code, the Company hereby agrees that it will seek the necessary approval from the stockholders of the Company and take the other steps reasonably necessary, and within its control, to satisfy the requirements of the Shareholder Approval Exception.
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Samples: Employment Agreement (Getty Images Holdings, Inc.), Employment Agreement (Getty Images Holdings, Inc.), Employment Agreement (Getty Images Holdings, Inc.)
280G Cutback. Notwithstanding any other provision of this Agreement anything to the contrarycontrary in this Agreement, if the payments made or and benefits provided pursuant to Section 6 herein are considered “parachute payments” under Code Section 280Gfor in this Agreement, then such parachute payments plus together with any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reduction, the net after tax benefit to Executive shall exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which that the Executive receives or then is entitled has the right to receive from the Company or an affiliate that Corporation, WGI and/or any of the Affiliates, would constitute a “parachute payment” within (as defined in Section 280G(b)(2) of the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive’s employmentCode), less (iv) the amount of excise taxes imposed with respect to then the payments and benefits described in provided hereunder (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required beginning with any payment to be reduced paid in accordance with this Section 10(icash hereunder) shall be made at reduced (but not below zero) so that the Company’s expense by a nationally recognized certified public accounting firm as may be designated present value of such total amounts and benefits received by the Company Executive will be $1.00 less than three times the Executive’s Base Amount and reasonably acceptable to Executive prior to a Change in Control (the “Accounting Firm”). In the event of any mistaken underpayment or overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, but only to the extent any such refund would result in (i) so that no portion of such payments being amounts and benefits received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code and (ii) a dollar-for-dollar Code. The determination as to whether any such reduction in the amount of the benefits provided hereunder is necessary shall be in accordance with the process described herein. The Compensation Committee, with advice of counsel and such advisors to counsel as the Compensation Committee deems necessary, shall promptly, following the Executive’s taxable income Separation from Service, make an initial determination as to whether a 280G cutback, as described in the immediately preceding paragraph, is required and wages the amount of any such cutback. Such initial determination shall be delivered to the Executive no later than the 21st day following his Separation from Service. In the event that the Executive wishes to challenge the initial determination, the Corporation shall reimburse the Executive for purposes of federalreasonable attorneys’ fees that he incurs in seeking advice concerning such initial determination, state provided that such reimbursement shall be conditional on the Corporation and local income the Executive’s chosen law firm, no later than 30 days following the Executive’s Separation from Service, signing a mutually acceptable engagement letter that sets forth a budget, hourly rates, a monthly billing arrangement for the law firm, and employment taxes, with interest at estimated fees for outside consultants (such as CPA firms and/or benefit consulting firms that may advise the applicable Federal rate provided for in Code Section 7872(f)(2law firm). Any reduction challenge that the Executive wishes to make to the initial determination shall be made by written notice no later than 30 days following his receipt of the Corporation’s initial determination. The Corporation and the Executive shall work together in good faith to resolve, within 21 days of the notice of challenge from the Executive, their disputes concerning the initial determination, and the Corporation shall make any necessary cutbacks to payments required by due to the Executive hereunder within three days after such resolution. If a reduced payment is called for in accordance with this Section 10(i) shall occur in 8.2 and, through error or otherwise, the following order: (1) any cash severancepayments and benefits already received by the Executive under this Agreement, (2) when aggregated with any other cash amount payable to Executive, payments and benefits from the Corporation or WGI (3or any of the Affiliates) any benefit valued as used in determining if a “parachute payment,” exists, exceed $1.00 less than three times the Executive’s Base Amount, then the Executive shall repay, upon 30 days’ written notice (with supporting calculations explaining the demand), such excess to the Corporation upon notification that an overpayment has been made. In the event that a 280G cutback in the Executive’s compensation is made under this Section 8.2 and (4) the acceleration Executive subsequently becomes convinced that it was made in error, then he shall promptly notify the Corporation of vesting such alleged error. The deadline for the Executive to notify the Corporation of any equitysuch alleged error shall be 10 days after his timely filing with the Internal Revenue Service of his first federal income tax return due following his Separation from Service. Any claim of the Executive that an error was made in computing the 280G cutback shall be forever waived if not made within the 10-based awardsday period described in the immediately preceding sentence. In the event that the Executive claims that an error was made in connection with a 280G cutback in his compensation, then the Executive and the Corporation shall work together in good faith for a period no longer than 60 days in attempting to resolve the claim. If the claim is not resolved within such 60-day period, then the Executive, no later than 14 days following the end of the 60-day period, shall make demand with the American Arbitration Association for arbitration of the claim under Article XI of this Agreement. If the Executive fails to make demand for arbitration of the claim with the American Arbitration Association within such 14-day period, then any rights he might have had to recover against the Corporation for an error made in the 280G cutback shall be forever waived. If the Executive makes a timely demand for arbitration with regard to an alleged error in the 280G cutback, the parties agree to proceed to arbitration promptly and to take all reasonable steps to cause the arbitration proceeding to occur within 90 days after the Executive makes demand with the American Arbitration Association for such arbitration. In the event that the arbitrator finds that the Corporation is indebted to the Executive due to an error made in connection with the 280G cutback, the Corporation shall pay the Executive the amount of the arbitrator’s award on the first Business Day following 45 days after the decision of the arbitrator becomes final.
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280G Cutback. Notwithstanding If any other provision payment, benefit or distribution of any type to or for the benefit of Executive, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement to the contrary, if payments made or benefits provided pursuant to Section 6 herein are considered “parachute payments” under Code Section 280G, then such parachute payments plus any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reductionotherwise (collectively, the net after tax benefit to “Parachute Payments”) would subject Executive shall exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a “parachute payment” within the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive’s employment), less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required to be reduced in accordance with this Section 10(i) shall be made at the Company’s expense by a nationally recognized certified public accounting firm as may be designated by the Company and reasonably acceptable to Executive prior to a Change in Control (the “Accounting Firm”). In the event of any mistaken underpayment or overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, but only to the extent any such refund would result in (i) no portion of such payments being subject to the excise tax imposed by under Section 4999 of the Code and (iithe “Excise Tax”) or would not be deductible as a dollar-for-result of Section 280G of the Code, the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar reduction ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax or would cause the Parachute Payments to not be deductible. The Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating accelerated vesting of stock options or other awards that vest based on attainment of performance measures, then by reducing or eliminating accelerated vesting of stock options or other awards that vest based only on Executive’s taxable income and wages for purposes of federalcontinued service to the Company, state and local income and employment taxestaking the last ones scheduled to vest (absent the acceleration) first, with interest at the applicable Federal rate provided for in Code Section 7872(f)(2). Any reduction in payments required then by this Section 10(i) shall occur in the following order: (1) any cash severance, (2) reducing or eliminating any other cash amount payable remaining Parachute Payments; provided, that no such reduction or elimination shall apply to Executiveany non-qualified deferred compensation amounts (within the meaning of Section 409A of the Code) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner that does not comply with Section 409A of the Code. THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, (3) any benefit valued as a “parachute payment,” and (4) the acceleration THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN. [The remainder of vesting of any equity-based awardsthis page is intentionally left blank.]
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280G Cutback. Notwithstanding If any other provision payment, benefit or distribution of any type to or for the benefit of Executive, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement to the contrary, if payments made or benefits provided pursuant to Section 6 herein are considered “parachute payments” under Code Section 280G, then such parachute payments plus any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reductionotherwise (collectively, the net after tax benefit to “Parachute Payments”) would subject Executive shall exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a “parachute payment” within the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive’s employment), less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required to be reduced in accordance with this Section 10(i) shall be made at the Company’s expense by a nationally recognized certified public accounting firm as may be designated by the Company and reasonably acceptable to Executive prior to a Change in Control (the “Accounting Firm”). In the event of any mistaken underpayment or overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, but only to the extent any such refund would result in (i) no portion of such payments being subject to the excise tax imposed by under Section 4999 of the Code and (iithe “Excise Tax”) or would not be deductible as a dollar-for-result of Section 280G of the Code, the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar reduction ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax or would cause the Parachute Payments to not be deductible. The Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating accelerated vesting of stock options or other awards that vest based on attainment of performance measures, then by reducing or eliminating accelerated vesting of stock options or other awards that vest based only on Executive’s taxable income and wages for purposes of federalcontinued service to the Company, state and local income and employment taxestaking the last ones scheduled to vest (absent the acceleration) first, with interest at the applicable Federal rate provided for in Code Section 7872(f)(2). Any reduction in payments required then by this Section 10(i) shall occur in the following order: (1) any cash severance, (2) reducing or eliminating any other cash amount payable remaining Parachute Payments; provided, that no such reduction or elimination shall apply to Executiveany non-qualified deferred compensation amounts (within the meaning of Section 409A of the Code) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner that does not comply with Section 409A of the Code. THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, (3) any benefit valued as a “parachute payment,” and (4) the acceleration THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN. [The remainder of vesting of any equity-based awardsthis page is intentionally left blank.]
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