Common use of Section 280G Limitation on Payments Clause in Contracts

Section 280G Limitation on Payments. 8.1 If any compensation, payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable regulations thereunder (the “280G Amounts”), (a) constitutes a “parachute payment” within the meaning of Code Section 280G and (b) but for this Section 8, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the 280G Amounts will be either (x) delivered in full; or (y) delivered as to such lesser extent that would result in no portion of the 280G Amounts being subject to the Excise Tax; whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Covered Employee on an after-tax basis, of the greatest amount of 280G Amounts, notwithstanding that all or some portion of the 280G Amounts may be taxable under Section 4999 of the Code.