Common use of Potential Section 280G Adjustment Clause in Contracts

Potential Section 280G Adjustment. In the event that any amount or benefit to be paid or provided to Executive pursuant to Section 7(c)(i), taken together with any amounts or benefits otherwise paid or provided to Executive by the Company or any affiliated company (collectively, the “Covered Payments”), would be an “excess parachute payment,” as defined in Section 280G of the Internal Revenue Code and the related Treasury Regulations and other guidance issued thereunder, and would thereby subject Executive to the tax imposed under Section 4999 of the Internal Revenue Code (the “Excise Tax”), then the Company shall either (A) make the Covered Payment to Executive without adjustment and subject to the Excise Tax, or (B) reduce the Covered Payments to the maximum amount that may be paid without Executive becoming subject to the Excise Tax (such reduced amount, the “Payment Cap”), whichever provides the greater net after-tax benefit to Executive. In the event that the reduction of the Covered Payments will provide Executive with the greater net after-tax benefit, Executive shall have the right to designate which of the payments and benefits otherwise provided for in Section 7(c)(i) that he will receive in connection with the application of the Payment Cap.

Potential Section 280G Adjustment. In the event that any amount or benefit to be paid or provided to Executive pursuant to Section 7(c)(i), taken together with any amounts or benefits otherwise paid or provided to Executive by the Company or any affiliated company (collectively, the “Covered Payments”), would be an “excess parachute payment,” as defined in Section 280G of the Internal Revenue Code and the related Treasury Regulations and other guidance issued thereunder, and would thereby subject Executive to the tax imposed under Section 4999 of the Internal Revenue Code (the “Excise Tax”), then the Company shall either (A) make the Covered Payment to Executive without adjustment and subject to the Excise Tax, or (B) reduce the Covered Payments to the maximum amount that may be paid without Executive becoming subject to the Excise Tax (such reduced amount, the “Payment Cap”), whichever provides the greater net after-tax benefit to Executive. In the event that the reduction of the Covered Payments will provide Executive with the greater net after-tax benefit, Executive shall have the right to designate which of the payments and benefits otherwise provided for in Section 7(c)(i) that he will receive in connection with the application of the Payment Cap.