Common use of Internal Revenue Code Section 280G Clause in Contracts

Internal Revenue Code Section 280G. In the event that it is determined that any payment or distribution of any type to the Employee or for the Employee’s benefit made by the Company, by any of its affiliates, by any Person who acquires ownership or effective control or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Code and the regulations thereunder) or by any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, 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 or penalties, are collectively referred to as the “Excise Tax”), then such payments or distributions or benefits shall be payable either: (a) in full or (b) in a lesser amount reflecting a reduction in payments to the extent necessary to result in no portion of such payments or distributions or benefits being subject to the Excise Tax. Method (b) shall be used unless method (a) provides a higher after-tax benefit to the Employee. If method (b) is used, then the Employee shall have the right to determine which payments or benefits will be reduced and in what magnitude. The Employee and the Company shall furnish such documentation and documents as may be necessary for the Company’s independent external accountants to perform the requisite computations and analysis contemplated by this Section 8.

Internal Revenue Code Section 280G. In the event that it is determined that any payment or distribution of any type to the Employee or for the Employee’s benefit made by the Company, by any of its affiliates, by any Person who acquires ownership or effective control or ownership of a substantial portion of the Company’s assets (within the he meaning of Section 280G of the Code and the regulations thereunder) or by any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, 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 or penalties, are collectively referred to as the “Excise Tax”), then such payments or distributions or benefits shall be payable either: (a) in full or (b) in a lesser amount reflecting a reduction in payments to the extent necessary to result in no portion of such payments or distributions or benefits being subject to the Excise Tax. Method (b) shall be used unless method (a) provides a higher after-tax benefit to the Employee. If method (b) is used, then the Employee shall have the right to determine which payments or benefits will be reduced and in what magnitude. The Employee and the Company shall furnish such documentation and documents as may be necessary for the Company’s independent external accountants to perform the requisite computations and analysis contemplated by this Section 8.