Common use of Section 280G Cutback Clause in Contracts

Section 280G Cutback. (a) Anything in this Agreement to the contrary notwithstanding, any Payments made pursuant to this Agreement shall be adjusted so that the aggregate present value of all “parachute payments” (as defined in Section 280G(b)(2) of the Code) to which you are entitled is less than 300% of your “annualized includible compensation for the base period” (as defined in Section 280G(d) of the Code). The determination as to whether there is any adjustment (and the extent thereof) in any Payments made pursuant to this Agreement due to this paragraph shall be made in writing within five (5) days prior to the receipt by you of a payment pursuant to, and in accordance with, Section 2 (the “Calculation Deadline”); provided, that such determination shall be made by the Company’s nationally recognized independent accountants, compensation consultants or legal counsel (“Independent Advisor”) and shall be final and binding on you and the Company. The Company shall furnish said Independent Advisor with all data required to make said determination within thirty (30) days prior to the Calculation Deadline. Notwithstanding the foregoing, the parties hereto agree that the Independent Advisor shall determine the “base amount” (as defined in Section 280G(b)(3) of the Code) applicable to the Payments as soon as practicable following January 31, 2010; provided, that (i) you and Chattem shall furnish to the Independent Advisor such information and documentation as may reasonably be requested by the Independent Advisor and (ii) a copy of such determination shall be provided to you and you shall have a reasonable opportunity to reasonably review and comment on such determination.