Common use of Parachute Treatment Clause in Contracts

Parachute Treatment. Notwithstanding any other provision of this Agreement to the contrary, if payments made hereunder or otherwise are considered “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then such excess parachute payments plus any other payments made by the Company and its affiliates that the Employee is entitled to receive that are considered excess parachute payments shall be limited to the greatest amount that may be paid to the Employee under Section 280G of the Code without causing any loss of deduction to the Company under such Code Section, but only if, by reason of such reduction, the “Net After Tax Benefit” (as defined below) to the Employee shall exceed the net after tax benefit if such reduction was not made. “Net After Tax Benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to the Employee that would constitute an “excess parachute payment” within the meaning of Section 280G of the Code less (ii) the amount of federal, state and other income taxes payable with respect to the foregoing calculated at the maximum marginal tax rate for each year in which the foregoing shall be paid to the Employee (based upon the rate in effect for such year as set forth in the Code at the time of termination of employment or the applicable change in control), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described above by Section 4999 of the Code. The determination of whether payments would be considered excess parachute payments and the calculation of all the amounts referred to in this section shall be made reasonably and in good faith by the parties, provided, that if the parties cannot agree, then such determination (and supporting calculations) shall be made by attorneys, accountants, or an executive compensation consulting firm each as selected by the Company at the expense of the Company (the “280G Service Providers”). Any determination by the 280G Service Providers made in good faith shall be binding upon the Company and the Employee.

Parachute Treatment. Notwithstanding any other provision of this Agreement to the contrary, if payments made hereunder and benefits provided for under this Agreement together with any payments or otherwise benefits under any other agreement or arrangement between the Company or any of its affiliates and you are considered “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then such excess parachute payments plus any other payments made by the Company and its affiliates that the Employee is you are entitled to receive that are considered excess parachute payments shall be limited to the greatest amount that may be paid to the Employee you under Section 280G of the Code without causing any loss of deduction to the Company under such Code Section, but only if, by reason of such reduction, the “Net After Tax Benefit” (as defined below) to the Employee you shall exceed the net after tax benefit if such reduction was not made. “Net After Tax Benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to the Employee you that would constitute an “excess parachute payment” within the meaning of Section 280G of the Code Code, less (ii) the amount of federal, state and other income taxes payable with respect to the foregoing calculated at the maximum marginal tax rate for each year in which the foregoing shall be paid to the Employee you (based upon the rate in effect for such year as set forth in the Code at the time of termination of your employment or the applicable change in control), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described above by Section 4999 of the Code. The determination of whether payments would be considered excess parachute payments and the calculation of all the amounts referred to in this section shall be made reasonably and in good faith by the parties, provided, that if the parties cannot agree, then such determination (and supporting calculations) shall be made by attorneys, accountants, or an executive compensation consulting firm each as selected by the Company at the expense of the Company (the “280G Service Providers”). Any determination by the 280G Service Providers made in good faith shall be binding upon the Company and the Employeeyou.

Parachute Treatment. Notwithstanding any other provision of (a) Anything in this Agreement to the contrarycontrary notwithstanding, if payments made hereunder it shall be determined that any payment, vesting, distribution, or transfer by the Company or any successor, or any Affiliate of the foregoing or by any other person or that any other event occurring with respect to the Executive and the Company for the Executive’s benefit, whether paid or payable or distributed or distributable under the terms of this Agreement or otherwise are considered (including under any employee benefit plan) (a “excess parachute payments” under Payment”) would be subject to or result in the imposition of the excise tax imposed by Section 280G 4999 of the Internal Revenue Code of 1986, as amended (and any regulations issued thereunder, any successor provision, and any similar provision of state or local income tax law) (collectively, the “CodeExcise Tax”), then such excess parachute payments plus any other payments made by the Company and its affiliates that amount of the Employee is entitled to receive that are considered excess parachute payments Payment shall be limited reduced to the greatest highest amount that may be paid by the Company or other entity without subjecting such Payment to the Employee Excise Tax (the “Payment Reduction”). The Executive shall have the right, in his sole discretion, to designate those payments or benefits that shall be reduced or eliminated under Section 280G the Payment Reduction to avoid the imposition of the Code without causing any loss of deduction Excise Tax. Notwithstanding the foregoing, the Payment Reduction shall not apply if the Executive would, on a net after-tax basis, receive less compensation than if the Payment were not so reduced. (b) Subject to the Company under such Code Section, but only if, by reason of such reduction, the “Net After Tax Benefit” (as defined below) to the Employee shall exceed the net after tax benefit if such reduction was not made. “Net After Tax Benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to the Employee that would constitute an “excess parachute payment” within the meaning provisions of Section 280G of 3.7(c), all determinations required to be made under this Section 3.7, including whether and when a Payment is subject to Section 4999 and the Code less (ii) the amount of federalassumptions to be utilized in arriving at such determination and in determining an appropriate Payment Reduction, state and other income taxes payable with respect to the foregoing calculated at the maximum marginal tax rate for each year in which the foregoing shall be paid to made by Ernst and Young, or any other nationally recognized accounting firm that shall be the Employee (based upon the rate in effect for such year as set forth in the Code Company’s outside auditors at the time of termination of employment or the applicable change in control), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described above by Section 4999 of the Code. The determination of whether payments would be considered excess parachute payments and the calculation of all the amounts referred to in this section shall be made reasonably and in good faith by the parties, provided, that if the parties cannot agree, then such determination (the “Accounting Firm”), which Accounting Firm shall provide detailed supporting calculations to the Executive and supporting calculationsthe Company within fifteen (15) business days of the receipt of notice from the Company or the Executive that there will be a Payment that the person giving notice believes may be subject to the Excise Tax. All fees and expenses of the Accounting Firm shall be made borne by attorneysthe Company. If the Accounting Firm shall determine that no Excise Tax is payable by the Executive, accountantsit shall furnish to the Executive written advice that failure to report the Excise Tax on his applicable federal income tax return would not be reasonably likely to result in the imposition of a penalty for fraud, negligence, or an executive compensation consulting firm each as selected by the Company at the expense disregard of the Company (the “280G Service Providers”)rules or regulations. Any determination by the 280G Service Providers made in good faith Accounting Firm shall be binding upon the Company and the EmployeeExecutive in determining whether a Payment Reduction is required and the amount thereof (subject to Sections 3.7(c) and (d)), in the absence of material mathematical or legal error. (c) As a result of uncertainty in the application of Section 4999 that may exist at the time of the initial determination by the Accounting Firm, it may be possible that in making the calculations required to be made hereunder, the Accounting Firm shall determine that a Payment Reduction need not be made that properly should be made (an “Overpayment”) or that a Payment Reduction not properly needed to be made should be made (an “Underpayment”). If, within seventy-five (75) days after the Accounting Firm’s initial determination under the preceding clause (b), the Accounting Firm shall determine that an Overpayment was made, any such Overpayment shall be treated for all purposes, to the extent practicable, as a loan to the Executive with interest at the applicable Federal rate provided for in Section 1274(d) of the Code; provided, however, that the amount to be repaid by the Executive to the Company shall be reduced to the extent that any portion of the Overpayment to be repaid will not be offset by a corresponding reduction in tax by reason of such repayment of the Overpayment. If the Accounting Firm shall determine that an Underpayment was made, any such Underpayment shall be due and payable by the Company to the Executive within thirty-five (35) days after the Company receives notice of the Accounting Firm’s determination. (d) The Executive shall give written notice to the Company of any claim by the IRS that, if successful, would require the payment by the Executive of an Excise Tax, such notice to be provided within fifteen (15) days after the Executive shall have received written notice of such claim. The Executive shall cooperate with the Company in determining whether to contest or pay such claim and shall not pay such claim without the written consent of the Company, which shall not be unreasonably withheld, conditioned or delayed. (e) This Section 3.7 shall remain in full force and effect following the termination of the Executive’s employment for any reason until the expiration of the statute of limitations on the assessment of taxes applicable to the Executive for all periods in which the Executive may incur a liability for taxes (including Excise Taxes), interest or penalties arising out of the operation of this Agreement.