Common use of Modification of Payments Clause in Contracts

Modification of Payments. A. In the event it shall be determined that any payment, right or distribution by the Company or any other person or entity to or for the benefit of Executive pursuant to the terms of this Agreement or otherwise, in connection with, or arising out of, his employment with the Company or a change in ownership or effective control of the Company or a substantial portion of its assets (a “Payment”) is a “parachute payment” within the meaning of Section 280G of the Code on account of the aggregate value of the Payments due to Executive being equal to or greater than three times the “base amount,” as defined in Section 280G(b)(3) of the Code, (the base amount hereinafter being referred to as the “Base Amount”) so that Executive would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”) and the net after-tax benefit that Executive would receive by reducing the aggregate Payments to an amount equal to 2.99 times the Base Amount is greater than the net after-tax benefit Executive would receive if the full amount of the Payments were paid to Executive, then the Payments payable to Executive shall be reduced (but not below zero) so that the aggregate Payments due to Executive do not exceed an amount equal to 2.99 times the Base Amount, reducing first any cash Payments and thereafter any equity or equity-based Payments.