IRC 280G Cutback Clause Samples

IRC 280G Cutback. (a) Notwithstanding any provision of this Agreement to the contrary, all sums payable in accordance with Section 1(a) herein shall be reduced in such manner and to such extent, but not below zero dollars, so that no such payments made in good faith hereunder when aggregated with all other payments to be made to the Executive by NWFL or ▇▇▇▇▇ shall be deemed an “excess parachute payment” for purposes of Section 280G of the Internal Revenue Code of 1986, as amended (“Code”), and thereby subjecting the Executive to liability for the payment of the excise tax provided at Section 4999(a) of the Code. NWFL’s independent public accountants will confirm the calculation of any necessary reduction in any payments to be made to the Executive, and NWFL will pay the professional fees for the accountant’s determination. (b) With respect to the payments payable pursuant to Section 1(a) herein, the value of the restrictions set forth in Section 3 herein shall be recognized in any calculation with respect to determining the affect, if any, of the parachute payment provisions of Section 280G of the Code, by allocating a portion of any payments, benefits or distributions in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to the fair value of the non-competition and non-solicitation restrictions under Section 3 herein (the “Appraised Value”). If deemed necessary, NWFL, at its expense, shall obtain an independent appraisal to determine the Appraised Value. The Appraised Value will be considered reasonable compensation for post change in control services within the meaning of Q&A-40 of the regulations under Section 280G of the Code; and accordingly, any aggregate parachute payments, as defined in Section 280G of the Code, will be reduced by the Appraised Value.