Reduction in Compensation to Avoid Excise Tax Sample Clauses
The "Reduction in Compensation to Avoid Excise Tax" clause is designed to adjust an employee's compensation to prevent the imposition of excise taxes, typically those associated with golden parachute payments under Section 280G of the Internal Revenue Code. In practice, this clause allows the employer to reduce certain payments or benefits that would otherwise trigger an excise tax liability for the employee, ensuring that the total compensation remains below the tax threshold. By including this provision, both parties can avoid the financial and administrative burdens of excise taxes, thereby maximizing the net benefit to the employee while minimizing additional costs for the employer.
Reduction in Compensation to Avoid Excise Tax. Notwithstanding anything herein to the contrary, if the excise tax imposed by Section 4999 of the Code or any similar or successor tax (the “Excise Tax”) applies to any payments, benefits and/or amounts received (or otherwise to be received) by Executive pursuant to Section 5(b) or otherwise, including, without limitation, amounts received or deemed received, within the meaning of any provision of the Code, by Executive as a result of (and not by way of limitation) any automatic vesting, lapse of restrictions and/or accelerated target or performance achievement provisions, or otherwise, applicable to outstanding grants or awards to Executive under any of Sabra’s incentive plans (collectively, the “Total Payments”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the Excise Tax; provided that such reduction to the Total Payments shall be made only if the total after-tax benefit to Executive is greater after giving effect to such reduction than if no such reduction had been made. If such a reduction is required, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any accelerated vesting of stock options that then have a term of one year or less and are then under-water, then by reducing or eliminating any cash severance benefits, then by reducing or eliminating any accelerated vesting of any other stock options, then by reducing or eliminating any accelerated vesting of other equity awards, and then by reducing or eliminating any other remaining Total Payments, in each case in reverse order beginning with the payments which are to be paid the farthest in time from the date of the related change in control event. The preceding provisions of this Section 6 shall take precedence over the provisions of any other plan, arrangement or agreement governing Executive’s rights and entitlements to any benefits or compensation. The Company agrees that, prior to and in connection with any Change in Control, the Company will reasonably consider alternatives (if any) Executive may have to eliminate or mitigate the impact of any Excise Tax on his Total Payments.
Reduction in Compensation to Avoid Excise Tax. In the event Executive would become entitled to any amounts payable in connection with a Change of Control (whether or not such amounts are payable pursuant to this Agreement) (the “Severance Payments”), if any of such Severance Payments would otherwise be subject to the excise tax on excess golden parachute payments imposed by Section 4999 of the Code (or any similar federal, state or local tax that may hereafter be imposed) (the “Excise Tax”), as determined in accordance with this Section 4(b), but prior to giving effect to any adjustment under this Section 4(b), the following provisions shall apply:
(i) For purposes of determining whether any of the Severance Payments would be subject to the Excise Tax and the amount of such Excise Tax:
(A) Severance Payments, including any payments or benefits other than those under this Section 4(b) received or to be received by Executive in connection with Executive’s termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a Change of Control or any person affiliated with the Company or such person) (which, together with the Severance Payments, constitute the “Total Payments”), shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless in the opinion of a nationally-recognized public accounting firm mutually acceptable to Executive and the Company such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 28OG(b)(4) of the Code in excess of the base amount within the meaning of Section 28OG(b)(3) of the Code, or are otherwise not subject to the Excise Tax;
(B) the amount of the Total Payments which shall be deemed to be treated as subject to the Excise Tax shall be equal to the lesser of (x) the total amount of the Total Payments and (y) the amount of excess parachute payments within the meaning of Section 28OG(b)(1) of the Code (after applying Section 4(b)(i)(A) hereof); and
(C) the value of any non-cash benefits or any deferred payments or benefit shall be determined by a nationally recognized public accounting firm mutually acceptable to Execut...
Reduction in Compensation to Avoid Excise Tax. Notwithstanding anything herein to the contrary, if the excise tax imposed by Section 4999 of the Code or any similar or successor tax (the “Excise Tax”) applies to any payments, benefits and/or amounts received (or otherwise to be received) by Executive pursuant to Section 5(b) or otherwise, including, without limitation, amounts received or deemed received, within the meaning of any provision of the Code, by Executive as a result of (and not by way of limitation) any automatic vesting, lapse of restrictions and/or accelerated target or performance achievement provisions, or otherwise, applicable to outstanding grants or awards to Executive under any of Sabra’s incentive plans (collectively, the “Total Payments”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the Excise Tax; provided that such reduction to the Total Payments shall be made only if the total after-tax benefit to Executive is