Common use of Section 280G of the Internal Revenue Code Clause in Contracts

Section 280G of the Internal Revenue Code. The amount of any payments or benefits payable to Executive pursuant to this Agreement shall be reduced (but not below zero) by the amount, if any, necessary to prevent any part of any payment or benefit received or to be received by the Executive in connection with a change in ownership or control (within the meaning of Section 280G of the Code and applicable regulations) of Transport America or the termination of the Executive’s employment (whether payable pursuant to the terms of this Agreement or pursuant to any other plan, contract, agreement or arrangement with Transport America, with any person whose actions result in a change in ownership or control of Transport America or with any person constituting a member of an “affiliated group” (as defined in section 280G(d)(5) of the Code)) with Transport America or with any person whose actions result in a change in ownership or control of Transport America (such foregoing payments or benefits referred to collectively as the “Total Payments”) from being treated as an “excess parachute payment” within the meaning of section 280G(b)(1) of the Code, but only if and to the extent such reduction will also result in, after taking into account all applicable state and federal taxes (computed at the highest marginal rate), including the Executive’s share of F.I.C.A. and Medicare taxes and any taxes payable pursuant to section 4999 of the Code, a greater after-tax benefit to the Executive than the after-tax benefit to the Executive of the Total Payments computed without regard to any such reduction. The amount of the reduction, if any, shall be determined by tax counsel selected by Transport America and acceptable to the Executive. Notwithstanding the foregoing, Transport America agrees to use its commercially reasonable best efforts to seek shareholder approval, pursuant to and in accordance with the requirements of Section 280G(b)(5)(A)(ii) and Section 280G(b)(5)(B) of the Code, of the Total Payments if and to the extent that such shareholder approval would exempt the payments and benefits from any excise taxes otherwise payable pursuant to Section 4999 of the Code. If such approval is not obtained or such shareholder approval exception is not then available, the provisions of the first two sentences of this Section 9 shall continue to apply. As used in this Agreement “Code” means the Internal Revenue Code of 1986 as amended.