Common use of Limitation on Change of Control Payments Clause in Contracts

Limitation on Change of Control Payments. (a) If the Change of Control Severance Benefits together with any other payment or benefit Executive would receive pursuant to a Change of Control (collectively, “COC Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such COC Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the COC Payment that would result in no portion of the COC Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the COC Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the COC Payment notwithstanding that all or some portion of the COC Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the COC Payment equals the Reduced Amount, reduction shall occur in the following order (in case prorated between those not subject to Section 409A and those subject to Section 409A as deferred compensation): (1) reduction of cash payments; (2) cancellation of acceleration of vesting; and (3) reduction of non-cash employee benefits. In the event that acceleration of vesting is to be reduced, it shall be cancelled in the reverse order of the date of grant of the Equity Awards. To the extent any such benefit is to be provided over time, then the benefit shall be reduced in reverse chronological order. (b) The Company may engage the accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control or another firm to perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such firm required to be made hereunder. (c) The accounting firm engaged to make the determinations hereunder shall be engaged by the Company to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a COC Payment is triggered (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.

Limitation on Change of Control Payments. This Section 5 applies only in the event the Company determines that this Agreement is subject to the limitations of Code Section 280G, or any successor provision, and the regulations issued thereunder. The intent of this Section 5 is to reduce any Change of Control Benefits, as defined below, that would otherwise be characterized as a “parachute payment” as defined in Code Section 280G and be subject to an additional excise tax under Code Section 4999 by the minimum amount necessary to avoid characterization as a parachute payment and avoid the imposition of the excise tax, but only if doing so would provide a more favorable net after-tax result to the Executive than if the Change in Control Benefits were not reduced and the Executive were subject to the excise tax. (a) If In the event the Change of Control Severance Benefits together with any other payment or benefit payable to Executive would receive pursuant to a Change of Control (collectively, “COC Payment”) would (i) collectively constitute a “parachute payment” within the meaning of as defined in Code Section 280G of the Internal Revenue Code of 1986G, as amended (and if the “Code”), and (ii) but for this sentence, net after-tax amount” of such parachute payment to Executive is less than what the net after-tax amount to Executive would be subject if the Change of Control Benefits otherwise constituting the parachute payment were limited to the maximum “parachute value” of Change of Control Benefits that Executive could receive without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such COC Payment the Change of Control Benefits otherwise constituting the parachute payment shall be reduced so that the parachute value of all Change of Control Benefits, in the aggregate, will equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion maximum parachute value of the COC Payment all Change of Control Benefits that would result in no portion Executive can receive without any Change of the COC Payment Control Benefits being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the COC Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the COC Payment notwithstanding that all or some portion of the COC Payment may be subject to the Excise Tax. If Should such a reduction in payments Change of Control Benefits be required, Executive shall be entitled, subject to the following sentence, to designate those Change of Control Benefits under this Agreement or benefits constituting “the other arrangements that will be reduced or eliminated so as to achieve the specified reduction in Change of Control Benefits to Executive and avoid characterization of such Change of Control Benefits as a parachute payments” is payment. The Company will provide Executive with all information reasonably requested by Executive to permit Executive to make such designation. To the extent that Executive’s ability to make such a designation would cause any of the Change of Control Benefits to become subject to any additional tax under Code Section 409A, or if Executive fails to make such a designation within ten business days of receiving the requested information from the Company, then the Company shall achieve the necessary so that reduction in the COC Payment equals the Reduced Amount, reduction shall occur Change of Control Benefits by reducing them in the following order order: (in case prorated between those not subject to Section 409A and those subject to Section 409A as deferred compensation): (1a) reduction of cash paymentspayments payable under this Agreement; (2b) reduction of other payments and benefits to be provided to Executive; (c) cancellation or reduction of acceleration accelerated vesting of vestingequity-based awards that are subject to performance-based vesting conditions; and (3d) cancellation or reduction of nonaccelerated vesting of equity-cash employee benefitsbased awards that are subject only to service-based vesting conditions. In If the event that acceleration of the vesting of Executive’s equity-based awards is to be cancelled or reduced, such acceleration of vesting is to be reduced, it shall be reduced or cancelled in the reverse order of the date of grant of the Equity Awards. To the extent any such benefit is to be provided over time, then the benefit shall be reduced in reverse chronological ordergrant. (b) The Company may engage For purposes of this Section 5, a “net after-tax amount” shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the accounting firm engaged by federal, state or local level, including the Company for general audit purposes Excise Tax, and the “parachute value” of the Change of Control Benefits means the present value as of the day prior to the effective date of the Change of Control or another firm to perform for purposes of Code Section 280G of the foregoing calculations. The Company shall bear all expenses with respect to the determinations by portion of such firm required to be made hereunderChange of Control Benefits that constitutes a parachute payment under Code Section 280G(b)(2). (c) The accounting firm engaged For purposes of this Section 5, “Change of Control Benefits” shall mean any payment, benefit or transfer of property in the nature of compensation paid to make or for the determinations hereunder shall be engaged by the Company to provide its calculationsbenefit of Executive under any arrangement which is considered contingent on a Change of Control for purposes of Code Section 280G, together with detailed supporting documentationincluding, to Executive without limitation, any and the Company within fifteen (15) calendar days after the date on which Executive’s right to a COC Payment is triggered (if requested at that time by Executive or all of the Company) ’s salary, incentive payments, restricted stock, stock option, equity-based compensation or such benefit plans, programs or other time as requested by Executive or the Companyarrangements, and shall include benefits payable under this Agreement.

Limitation on Change of Control Payments. Anything in this Agreement to the contrary notwithstanding, if the Committee determines upon a Change of Control that the Net Aggregate Change of Control Payments exceeds 10% of the Company’s Market Capitalization, each of the Change of Control Payments payable to the Executive shall be reduced by the percentage obtained by dividing (ai) the Excess Change of Control Payments by (ii) the Gross Aggregate Change of Control Payments. If the Change of Control Severance Benefits together with any other payment or benefit Executive would receive payments are reduced pursuant to a the preceding sentence and if after such reduction any amounts that were previously not tax deductible by the Company become tax deductible such that the Net Aggregate Change of Control Payments (collectively, “COC Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such COC Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the COC Payment that would result in no portion of the COC Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the COC Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results reductions in Executive’s receipt, on an after-tax basis, of the greater amount of the COC Payment notwithstanding that all or some portion of the COC Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the COC Payment equals the Reduced Amount, reduction shall occur in the following order (in case prorated between those not subject to Section 409A and those subject to Section 409A as deferred compensation): (1) reduction of cash payments; (2) cancellation of acceleration of vesting; and (3) reduction of non-cash employee benefits. In the event that acceleration of vesting is to be reduced, it shall be cancelled in the reverse order of the date of grant of the Equity Awards. To the extent any such benefit is to be provided over time, then the benefit shall be reduced in reverse chronological order. (b) The Company may engage the accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control or another firm Payments determined in the preceding sentence) is less than 10% of the Company’s Market Capitalization, the percentage determined in the preceding sentence will be successively recomputed to perform proportionately increase the amount of each Change of Control Payment until the Net Aggregate Change of Control Payments (after taking into account any adjustments to the Change of Control Payments required by this sentence) equals 10% of the Company’s Market Capitalization. Any provision in this Section 6.8 to the contrary notwithstanding, if the foregoing calculationsprovisions of this Section 6.8 would otherwise cause the amount of the Severance Payment payable to the Executive pursuant to Section 7.3(b) and 7.4 to be reduced to an amount that is less than the sum of the Executive’s Base Salary and Target Annual Bonus, the amount of the Severance Payment, if any, payable to the Executive pursuant to Section 7.3(b) and 7.4 shall equal an amount that is not less than the sum of the Executive’s Base Salary and Target Annual Bonus and there will be no further adjustment to the amount of Change of Control Payments made to any other Affected Executive to reflect any such increase in the Executive’s Severance Payment. The Company following definitions shall bear all expenses with respect to the determinations by such firm required to be made hereunder. (c) The accounting firm engaged to make the determinations hereunder shall be engaged by the Company to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a COC Payment is triggered (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.apply for purposes of this Section 6.8: