Common use of Order of 280G Option Vesting Reduction Clause in Contracts

Order of 280G Option Vesting Reduction. Unless provided otherwise in the Participant’s employment agreement with the Company, the reduction of Option vesting, if applicable, shall be effected in the following order, but only to the extent that each item listed provides for a reduction to minimize Section 280G consequences: (i) any cash parachute payments, (ii) any health and welfare or similar benefits valued as parachute payments, (iii) acceleration of vesting of any stock options for which the exercise price exceeds the then fair market value of the underlying stock, in order of the option tranches with the largest Section 280G parachute payment value, (iv) acceleration of vesting of any equity award that is not a stock option, and (v) acceleration of vesting of any stock options for which the exercise price is less than the fair market value of the underlying stock in such manner as would net the Participant the largest remaining spread value if the options were all exercised as of the Code Section 280G event.