280G Reduction in Amounts Payable Clause Samples
The 280G Reduction in Amounts Payable clause is designed to limit payments to an executive or employee in the event of a change in control, so that such payments do not trigger excise taxes under Section 280G of the Internal Revenue Code. In practice, this clause typically requires that if the total payments due to the individual would exceed the threshold for "parachute payments" and result in additional taxes, the payments will be reduced to a level that avoids these penalties. This ensures that both the company and the recipient avoid costly tax consequences, providing financial predictability and compliance with tax regulations during mergers or acquisitions.
280G Reduction in Amounts Payable. In no event shall any amount payable under any provision of this Agreement equal or exceed an amount which would cause the Company to forfeit, pursuant to Code Section 280G(a), its deduction for any and all such amounts payable. Pursuant to this Section 5.9, the Company has the power to reduce the Contract Termination Fee payable under this Agreement, only if such benefits alone or in conjunction with termination benefits provided under any other plan or agreement between the Executive and the Company, would cause the Company to forfeit otherwise deductible payments; provided, however, that no amounts payable under this Agreement shall be reduced pursuant to this Section 4(g) to less than $1.00 below the amount of benefits which the Company can properly deduct under Section 280G(a) of the Code.
280G Reduction in Amounts Payable. In no event shall any amount payable under any provision of this Agreement equal or exceed an amount which would cause the Company to forfeit, pursuant to Code Section 280G(a), its deduction for any and all such amounts payable. Pursuant to this Section 4.9, the Company has the power to reduce the Severance Amount and/or the Change in Control bonus due under Section 3.3 that are payable under this Agreement, only if such benefits alone (without consideration of termination benefits provided under any other plan or agreement between the Executive and the Company), would cause the Company to forfeit otherwise deductible payments; provided, however, that no amounts payable under this Agreement shall be reduced pursuant to this Section 4.9 to less than one dollar ($1.00) below the amount of benefits which the Company can properly deduct under Section 280G(a) of the Code; and provided, further, that compensation that is non-exempt deferred compensation under Code Section 409A shall not be reduced until the date that such compensation is both payable and included in income.