Excess Parachute Payments under Code Section 280G Clause Samples
Excess Parachute Payments under Code Section 280G. Notwithstanding any other provisions of this Agreement, if any “payments” (including, without limitation, any benefits or transfers of property or the acceleration of the vesting of any benefits) in the nature of compensation under any arrangement that is considered contingent on a Change of Control for purposes of Section 280G of the Code, together with any other payments that the Executive has the right to receive from the Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member or from any other Person, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), such “payments” may, at the Executive’s sole election, be reduced to the largest amount that will result in no portion of such “payments” being subject to the excise tax imposed by Section 4999 of the Code. Any such reduction in “payments” shall be applied first against the latest scheduled cash payments; then current cash payments; then any equity or equity derivatives that are included under Section 280G of the Code at full value rather than accelerated value (with the highest value reduced first); then any equity or equity derivatives included under Section 280G of the Code at an accelerated value (and not at full value), with the highest value reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24); and finally any other non-cash benefits will be reduced (in the order of latest scheduled payments to earliest scheduled payments). All calculations hereunder shall be performed by a nationally recognized independent accounting firm selected by the Company, with the full cost of such firm being borne by the Company. Any determinations made by such firm shall be final and binding on the Executive and the Company.
Excess Parachute Payments under Code Section 280G. (a) If any of the payments or benefits to be provided by the Company or its affiliates to the Executive or for the Executive’s benefit under this Agreement or otherwise (“Covered Payments”) constitute parachute payments (“Parachute Payments”) under Section 280G of the Code and would, but for this Section 13(a) 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, before making any Covered Payments, the Company will compare (i) the Net Benefit (as defined below) to the Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to the Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount under (ii), 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 (that amount, the “Reduced Amount”). “Net Benefit” means the present value of the Covered Payments net of all federal, state, local, foreign income, employment, and excise taxes.
Excess Parachute Payments under Code Section 280G. Notwithstanding any other provisions of this Agreement, if any “payments” (including, without limitation, any benefits or transfers of property or the acceleration of the vesting of any benefits) in the nature of compensation under any arrangement that is considered contingent on a Change in Control for purposes of Section 280G of the Code, together with any other payments that Executive has the right to receive from the Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), such “payments” may, at Executive’s sole election, be reduced to the largest amount as will result in no portion of such “payments” being subject to the excise tax imposed by Section 4999 of the Code. The type of payments to be electively reduced under this paragraph, if any, will be at the discretion of Executive.
Excess Parachute Payments under Code Section 280G. Notwithstanding any other provisions of this Agreement or any other agreement, contract or understanding heretofore or hereafter entered into between the Executive and the Company, if any “payments” (including, without limitation, any benefits or transfers of property or the acceleration of the vesting of any benefits) in the nature of compensation under any arrangement that is considered contingent on a Change in Control for purposes of Code Section 280G, together with any other payments that the Executive has the right to receive from the Company or any corporation that is a member of an “affiliated group” (as defined in Code Section 1504(a) without regard to Code Section 1504(b)) of which the Company is a member, would constitute a “parachute payment” (as defined in Code Section 280G(b)(2)), such “payments” will be reduced to the largest amount as will result in no portion of such “payments” being subject to the excise tax imposed by Code Section 4999; provided, however, that such reduction will be made only if the aggregate amount of the payments after such reduction exceeds the difference between (i) the amount of such payments absent such reduction minus (ii) the aggregate amount of the excise tax imposed under Code Section 4999 attributable to any such excess parachute payments. The parachute payments to be reduced under this Section 5(g) will be reduced in the following order: lump sum cash severance, health plan benefits, and option acceleration.
Excess Parachute Payments under Code Section 280G. In the event the Employee receives any CIC Severance Benefit under this CIC Agreement which would constitute a “parachute payment” for purposes of Code Section 280G or any successor provision and the regulations thereunder, the Employee shall either, in the Employee’s discretion: (A) receive only the CIC Severance Benefit in the amount so that it is not deemed a “parachute payment” for purposes of Code Section 280G or (B) receive all of the CIC Severance Benefit and be responsible, without any responsibility to the Company, to pay any and all taxes on any and all portions of the CIC Severance Benefit which is deemed to be a “parachute payment” pursuant to Code Section 280G.
Excess Parachute Payments under Code Section 280G i. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (including any acceleration) by the Company or any entity which effectuates a transaction described in Section 280G(b)(2)(A)(i) of the Code to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise, but determined before application of any reductions required pursuant to this Section 22(c) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred with respect to such excise tax by the Executive (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company will automatically reduce such Payments to the extent, but only to the extent, necessary so that no portion of the remaining Payments will be subject to the Excise Tax, unless the amount of such Payments that the Executive would retain after payment of the Excise Tax and all applicable Federal, state and local income taxes without such reduction would exceed the amount of such Payments that the Executive would retain after payment of all applicable Federal, state and local taxes after applying such reduction. Unless otherwise elected by the Executive, to the extent permitted under Code Section 409A, such reduction shall first be applied to any severance payments payable to the Executive under this Agreement, then to the accelerated vesting on any stock options, restricted stock awards, restricted stock units or any other form of equity compensation, starting with stock options reversing accelerated vesting of those options with the largest negative spread between fair market value and exercise price (the “Spread”) first and after reversing the accelerated vesting of all stock options with a negative Spread, reversing accelerated vesting of those options with the smallest positive Spread, and if additional reductions are required after reversal of accelerated vesting of all stock options, accelerated vesting of restricted stock awards, restricted stock units and all other forms of equity awards will be reversed on a pro rata basis until the Payments are no longer subject to the Excise Tax.
ii. All determinations required to be made under this Section 22(c), including the assumptions to be utilized in arriving at such determination, shall be made by the Company’s independent ...