Section 280G. To the extent that any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided.
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement (Fleetcor Technologies Inc)
Section 280G. To the extent that any “disqualified individual” with respect necessary to avoid the Company or any of its Affiliates (within the meaning application of Section 280G(c) 280G of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code applicable final Treasury Regulations and the regulations rulings thereunder, then, the Company will (i) no later than four five (45) Business Days prior to the Closing Date, the Company shall (a) use commercially reasonable best efforts to obtain waivers from each such “disqualified individual” Person who has a waiver of such disqualified individual’s rights right to some or all of such any payments or benefits (as a result of or in connection with the transactions contemplated by this Agreement that would reasonably be expected to constitute “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations applicable Treasury Regulations thereunder and as to which such Person waives his or her rights to some or all of such payments and/or benefits (such payments or benefits actually waived, the “Waived 280G Benefits”) applicable to such Person so that all remaining payments or benefits applicable to such Person shall not be deemed to be “excess parachute payments” within the meaning of Section 280G of the Code and the applicable Treasury Regulations thereunder), and (iib) no later than two (2) Business Days prior to following the Closing Date, with respect to each individual who agrees to execution of the waiver waivers described in clause (ia), submit solicit the approval of the stockholders of the Company of any Waived 280G Benefits pursuant to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy meet the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any regulations promulgated the applicable Treasury Regulations thereunder) , which related documents shall be in a form reasonably satisfactory to the right of any such “disqualified individual” to receive SPAC (provided that the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts SPAC’s approval of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will form shall not be unreasonably withheld, conditioned withheld or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval). If To the extent any of the Waived 280G Benefits fail to be were not approved by the stockholders of the Company as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, On or prior to the Closing Date, the Company shall deliver to Parent the SPAC evidence reasonably acceptable to Parent that a vote of holders of the equity interests stockholders of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 7.19 and that either (i) the requisite number of votes of holders of the equity interests of the Company was were obtained with respect to the Waived 280G Benefits (the “280G Approval”) ), or (ii) that the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided. The Company shall provide the SPAC with a copy of such waiver and disclosure statement within a reasonable time prior to, and in no event later than two (2) Business Days prior to, delivery to the “disqualified individuals” and the stockholders of the Company of such waiver and disclosure statement, respectively, and the Company shall reflect in such waiver and disclosure statement any changes reasonably requested by the SPAC (provided that the SPAC’s approval of such changes shall not be unreasonably withheld or delayed). No later than seven (7) Business Days prior to the Closing Date, the Company shall provide the SPAC with a summary of the calculations and related documentation reasonably required to determine whether the vote described in this Section 7.19 is necessary in order to avoid the imposition of Taxes under Section 4999 of the Code.
Appears in 2 contracts
Samples: Business Combination Agreement (Tailwind Acquisition Corp.), Business Combination Agreement (Tailwind Acquisition Corp.)
Section 280G. To (a) Notwithstanding anything in this Agreement to the extent contrary, in the event that any payment or benefit received or to be received by Executive (including any payment or benefit received in connection with a “disqualified individualChange in Control” with respect (as defined in the 2005 Plan) or the termination of Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits being hereinafter referred to as the “Total Payments”) would not be deductible (in whole or part) by the Company or any of its Affiliates (within the meaning making such payment or providing such benefit as a result of Section 280G(c) 280G of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts extent necessary to obtain from each make such “disqualified individual” a waiver portion of such disqualified individual’s rights to some or all of such payments or benefits the Total Payments deductible (and after taking into account any reduction in the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning Total Payments provided by reason of Section 280G of the Code and in such other plan, arrangement or agreement), the regulations thereunderportion of the Total Payments that do not constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with cash payments being reduced before non-cash payments, and payments to be paid last being reduced first.
(b) For purposes of this limitation, (i) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no later than two portion of the Total Payments shall be taken into account which, in the opinion of tax counsel (2“Tax Counsel”) Business Days reasonably acceptable to Executive and selected by the accounting firm which was, immediately prior to the Closing DateChange in Control, with respect to each individual who agrees to the waiver described in clause Company’s independent auditor (ithe “Auditor”), submit to does not constitute a vote of holders of “parachute payment” within the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements meaning of Section 280G(b)(5)(B)(ii280G(b)(2) of the Code and any regulations promulgated thereunderCode, including by reason of Section 280G(b)(4)(A) of the Code; (iii) the right of any such “disqualified individual” severance payments payable to receive the Waived 280G Benefits. Prior Executive pursuant to soliciting such waivers and approval, the Company Section 5 hereof shall provide drafts of such waivers and disclosure and approval materials be reduced only to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior necessary so that the Total Payments (other than those referred to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either clauses (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) of this paragraph) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions by reason of Section 280G Approval was not obtainedof the Code, and, as a result, no Waived 280G Benefits in the opinion of Tax Counsel; and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be made determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
(c) If it is established pursuant to a final determination of a court of competent jurisdiction or providedan Internal Revenue Service proceeding that, notwithstanding the good faith of Executive and the Company in applying the terms of this Section 7, the Total Payments paid to or for Executive’s benefit are in an amount that would result in any portion of such Total Payments being subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, if such repayment would result in (i) no portion of the remaining Total Payments being subject to the Excise Tax and (ii) a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, the Executive shall have an obligation to pay the Company upon demand an amount equal to the sum of (x) the excess of the Total Payments paid to or for Executive’s benefit over the Total Payments that could have been paid to or for Executive’s benefit without any portion of such Total Payments being subject to the Excise Tax; and (y) interest on the amount set forth in clause (x) of this sentence at the rate provided in Section 1274(b)(2)(B) of the Code from the date of Executive’s receipt of such excess until the date of such payment.
Appears in 2 contracts
Samples: Employment Agreement (Aircastle LTD), Employment Agreement (Aircastle LTD)
Section 280G. To As soon as reasonably practical after the extent that any execution of this Agreement, the Company shall (a) use commercially reasonable efforts to obtain from each “disqualified individual” with respect to (as defined in Section 280G(c) of the Code) of the Company or a waiver by such individual of any and all payments and benefits contingent on the consummation of its Affiliates the transactions contemplated by this Agreement (within the meaning of Section 280G(c280G(b)(2)(A)(i) of the Code Code) to the extent necessary so that such payments and the regulations thereunder) benefits would receive any payments or benefits that would reasonably not be expected to constitute “excess parachute payments” (within the meaning of under Section 280G(b)(2)(A) 280G of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so and (b) submit to its applicable securitityholders for a vote all such Waived 280G Benefits in a manner and form that any remaining payments and/or benefits shall not be deemed is intended to be “comply with the equityholder approval procedures set forth in Section 280G(b)(5)(B) of the Code (in a manner reasonably satisfactory to Purchaser), including A-7 of Section 1.280G-1 of the Treasury Regulations, to render the parachute payments” (within the meaning payment provisions of Section 280G of the Code and the regulations thereunderTreasury Regulations thereunder (collectively, “Section 280G”) inapplicable to any and all payments and/or benefits provided that might result, separately or in the aggregate, in the payment of any amount and/or the provision of any benefit that would not be deductible by reason of Section 280G or that would be subject to an excise tax under Section 4999 of the Code (together, the “Section 280G Payments”). The Company agrees that: (i) in the absence of such stockholder approval, no Section 280G Payments shall be made; and (ii) as soon as reasonably practicable after execution of this Agreement, the Company shall deliver to Purchaser (A) waivers, in form and substance satisfactory to Purchaser, duly executed by each Person who might receive any Section 280G Payment, and (B) the parachute payment calculations prepared by the Company and/or its advisors. The form and substance of all stockholder approval documents contemplated by this Section 5.19, including the waivers, shall be subject to the prior review and comment of Purchaser. The Company shall provide such documentation and information to Purchaser for its review and comment no later than two ten (210) Business Days prior to soliciting waivers from the “disqualified individuals,” and the Company shall implement all reasonable and timely comments from Purchaser thereon. The parties acknowledge that this Section 5.19 shall not apply to any arrangements entered into (or to be entered into) at the direction of Purchaser, on the one hand, and a disqualified individual, on the other hand (the “Purchaser Arrangements”), unless Purchaser provides to the Company, no less than ten (10) Business Days prior to the Closing Date, with respect prior to each individual who agrees soliciting waivers from the “disqualified individuals,” sufficient information regarding any Parent Arrangements necessary to assess the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements value for purposes of Section 280G(b)(5)(B)(ii) 280G of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers Parent Arrangements and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheldinclude, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated abovenecessary, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a Arrangements in any securityholder vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedmaterials.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Ambipar Emergency Response), Purchase and Sale Agreement (Ambipar Emergency Response)
Section 280G. To (a) The Company shall obtain and deliver to Parent prior to the extent that any initiation of the requisite stockholder approval procedure under Section 5.6(b), a Parachute Payment Waiver (the “disqualified individual” Parachute Payment Waiver”) from each Person who the Company or Parent reasonably believes could be, with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunderCompany, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such a “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations promulgated thereunder), and (ii) no later than two (2) Business Days as determined immediately prior to the Closing Dateinitiation of the requisite stockholder approval procedure under Section 5.6(b), with respect and who might otherwise have received, receive or have the right or entitlement to each individual who agrees receive a Section 280G Payment (as defined below), to the waiver described extent the value thereof equals or exceeds three times such Person’s “base amount” determined in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along accordance with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) 280G of the Code and any the regulations promulgated thereunder) , unless the right of any such “disqualified individual” to receive the Waived 280G Benefits. Stockholder Approval (as defined below) is obtained pursuant to Section 5.6(b).
(b) Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall submit to the applicable Company Stockholders, for approval by such Company Stockholders holding the number of shares of stock required by the terms of Section 280G(b)(5)(B) of the Code, a written consent in favor of a proposal to render the parachute payment provisions of Section 280G of the Code and the regulations thereunder inapplicable to all Section 280G Payments. “Section 280G Payments” means any payments or benefits provided pursuant to Company Employee Plans or other plans, programs, arrangements or Contracts that might reasonably be expected to result, separately or in the aggregate, in the payment of any amount or the provision of any benefit that causes the payments or benefits to not be deductible by reason of Section 280G or that would be subject to an excise tax under Section 4999 of the Code. Prior to delivery of documents to the stockholders in connection with the stockholder approval contemplated by this Section 5.6(b), the Company shall provide Parent and its counsel with a reasonable opportunity to review all documents to be delivered to the stockholders in connection with such stockholder approval. Any such stockholder approval shall be sought by the Company in a manner which satisfies all applicable requirements of Section 280G(b)(5)(B) of the Code and the Treasury Regulations thereunder, including Q-7 of Section 1.280G-1 of such Treasury Regulations. Notwithstanding the foregoing, to the extent that any contract, agreement, or plan is entered into by Parent, the Surviving Corporation or any of their Affiliates and a disqualified individual in connection with the transactions contemplated by this Agreement before the Closing Date (the “Purchaser Arrangements”), Parent shall provide a copy of such contract, agreement or plan to the Company a reasonable period of time before the Closing Date and shall cooperate with the Company in good faith in order to calculate or determine the value (for the purposes of Section 280G of the Code) of any payments or benefits granted or contemplated therein, which may be paid or granted in connection with the transactions contemplated by this Agreement that could constitute a “parachute payment” under Section 280G of the Code. Prior to the Closing, the Company shall deliver to Parent evidence Certain information has been excluded from this agreement (indicated by “[***]”) because such information (i) is not material and (ii) would be competitively harmful if publicly disclosed. written notification and documentation reasonably acceptable satisfactory to Parent that (i) a vote of the holders of the equity interests of the Company Capital Stock was solicited in accordance conformance with Section 280G of the foregoing provisions of this Section 7.11 Code and that either (i) the regulations promulgated thereunder and the requisite number of votes of holders of the equity interests of the Company stockholder approval was obtained with respect to any payments and benefits that were subject to the Waived 280G Benefits stockholder vote (the “280G Stockholder Approval”) or (ii) that the 280G Stockholder Approval was not obtained, and, obtained and as a resultconsequence, no Waived 280G Benefits that such payments and benefits shall not be made or providedprovided (or shall be returned) to the extent they would cause any amounts to constitute Section 280G Payments, pursuant to the Parachute Payment Waivers that were executed by the affected individuals prior to the solicitation of the vote of the holders of Company Capital Stock pursuant to this Section 5.6(b).
Appears in 1 contract
Samples: Merger Agreement (Cardlytics, Inc.)
Section 280G. To Notwithstanding anything in this Agreement or otherwise to the extent contrary, in the event that any “disqualified individual” with respect to payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Issuer, the Company or any member of the Company Group, or any entity that effectuates a change of control (or any of its Affiliates affiliates) to or for the benefit of the Employee (whether pursuant to the terms of this Agreement or any other plan, equity-based award, arrangement, agreement or otherwise) (all such payments, awards, benefits and/or distributions being hereinafter referred to as the “Total Payments”) would be subject to the excise tax under Section 4999 of the Code (or any successor provision) (the “Excise Tax”), then:
(a) If no “stock” of the Company Group is then “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(c280G(b)(5)(A)(ii)(I) of the Code and Code, prior to the regulations thereunderclosing of the applicable transaction, the Company (or the applicable corporation undergoing a change in control) would receive shall make good faith efforts to obtain shareholder approval of the Total Payments, such that upon shareholder approval, such portion of the Total Payments shall be not subject to the Excise Tax. The Employee shall fully cooperate to ensure that such shareholder approval of all such Total Payments is valid (including by executing all required waivers). Failure to obtain such shareholder approval following good faith efforts of the Company (or the applicable corporation undergoing a change in control) shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax. In addition, the Employee can voluntarily decide not to execute the waiver, in which case the failure of the Company (or benefits the applicable corporation undergoing a change in control) to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax.
(b) In the event that would reasonably be expected to constitute (i) the shareholder approval described in Section 19(a) is not obtained or (ii) the “parachute paymentsstock” (of the Company Group is “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(2)(A280G(b)(5)(A)(ii)(I) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Dateextent necessary to make such portion of the Total Payments not subject to the Excise Tax, use reasonable best efforts to obtain from each such “disqualified individual” a waiver the portion of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so Total Payments that any remaining payments and/or benefits shall do not be deemed to be “parachute payments” (constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with any such reduction being made as follows: cash payments being reduced before equity-based compensation or other non-cash compensation or benefits, in each case, in reverse order beginning with payments or benefits that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code, provided that, in the case of all of the foregoing Total Payments, all amounts that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c)f as would result in no portion of the payments being considered “excess parachute payments” under Section 280G of the Code.
(c) Section 19(b) shall not apply and no reduction of Total Payments will occur if (i) clause 19(b)(ii) is applicable and (ii) (1) the net amount of such Total Payments, as reduced pursuant to Section 19(b) (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is less than (2) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of excise tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(d) Any determinations that are made pursuant to this Section 19 shall be made by a nationally recognized certified public accounting firm that shall be selected by the Company (and paid by the Company) prior to any transaction that is subject to Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits Employee (the “280G ApprovalAccountant”) or (ii) the 280G Approval was not obtained), and, as a result, no Waived 280G Benefits which determination shall be made or providedcertified by the Accountant and set forth in a certificate delivered to the Employee setting forth in reasonable detail the basis of the Accountant’s determinations.
Appears in 1 contract
Samples: Employment Agreement (Duck Creek Technologies, Inc.)
Section 280G. To With respect to any payment or benefit retained or received, in whole or in part, in connection with the extent that any transactions contemplated by this Agreement, (a) following the date of this Agreement, and prior to soliciting the stockholder vote described in sub-clause (b) below, the Company shall solicit from each individual who is or would reasonably be expected to be, as of the Effective Time, a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of as defined in Section 280G(c) of the Code Code) who has received or may receive payments and the regulations thereunder) would receive any payments or benefits that would reasonably could be expected to constitute deemed a “parachute paymentspayment” (within the meaning of as defined in Section 280G(b)(2)(A280G(b)(2) of the Code and the regulations thereunder, then, the Company will Code) (i“Section 280G Payments”) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits the Section 280G Payments (the “Waived 280G BenefitsPayments” and, each such waiver, a “280G Waiver”) so that any all remaining payments and/or benefits Section 280G Payments, if any, shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderCode), and (iib) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i)provides a duly executed 280G Waiver, submit to a stockholder vote of holders of the equity interests of the Company entitled to vote on such matters (along in compliance with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any the regulations promulgated thereunder) the right of any such “disqualified individual” to retain or receive the Waived 280G BenefitsPayments. Prior The Company shall take all actions necessary to comply with the requirements of the exemption provided under Section 280G(b)(5)(B) of the Code, including by (i) soliciting such waivers any necessary 280G Waivers and approval(ii) preparing, and causing to be sent to the Company’s stockholders, a disclosure document including relevant information (and underlying calculations) with respect to this Agreement and the transactions contemplated by this Agreement meeting the requirements of Section 280G(b)(5)(B) of the Code (the “Company Disclosure Document”). The Company shall deliver a draft of the Company shall provide drafts of such waivers and disclosure and approval materials Disclosure Document to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four ten (410) Business Days prior to soliciting the Closing Date and, as promptly as reasonably practicable following such waivers and soliciting such approval. If delivery, Parent shall provide the Company its comments, if any of regarding the Waived Company Disclosure Document, including those portions relating to the Section 280G Benefits fail to be approved as contemplated abovePayments, and the Company shall consider in good faith such Waived 280G Benefits shall not be made or providedcomments of Parent. To the extent applicable, At least three (3) Business Days prior to the Closing DateEffective Time, the Company shall deliver to Parent notification and evidence reasonably acceptable satisfactory to Parent that a vote of holders of the equity interests of the Company Company’s stockholders was solicited in accordance conformance with Section 280G(b)(5)(B) of the foregoing provisions of this Section 7.11 Code and that the regulations promulgated thereunder with respect to the Waived 280G Payments and either (ix) the requisite number of votes of holders of the equity interests of the Company approval was obtained with respect to the Waived 280G Benefits Payments (the “280G Stockholder Approval”) or (iiy) the 280G Stockholder Approval was not obtained, obtained and, as a resultconsequence, no such Waived 280G Benefits Payments shall not be made or provided.
Appears in 1 contract
Section 280G. To (a) If any payment or benefit (including payments and benefits pursuant to the extent Agreement) that any the Executive would receive in connection with a Change of Control or other transaction (the “disqualified individual” with respect to Transaction”) from the Company or any of its Affiliates otherwise (within the meaning of Section 280G(c) of the Code and the regulations thereunder“Transaction Payment”) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” constitute a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute paymentspayment” (within the meaning of Section 280G of the Code and the regulations thereunder)Code, and (ii) no later than but for the sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to payment of only a vote of holders part of the equity interests Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Company entitled Excise Tax (a “Reduced Payment”). For purposes of determining whether to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalmake a Full Payment or a Reduced Payment, the Company shall provide drafts cause to be taken into account the value of all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such waivers state and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approvallocal taxes). If any of the Waived 280G Benefits fail to be approved as contemplated abovea Reduced Payment is made, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (ix) the requisite number of votes of holders of Executive shall have no rights to any additional payments and/or benefits
7. constituting the equity interests of Transaction Payment, and (y) reduction in payments and/or benefits shall occur in the Company was obtained with respect to the Waived 280G Benefits manner (the “280G ApprovalReduction Method”) that results in the greatest economic benefit to the Executive as determined in the paragraph. If more than one method of reduction will result in the same economic benefit, the portions of the Transaction Payment shall be reduced pro rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or (ii) the 280G Approval was Pro Rata Reduction Method would result in any portion of the Transaction Payment being subject to taxes pursuant to Section 409A that would not obtainedor otherwise be subject to taxes pursuant to Section 409A, andthen the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a resultfirst priority, no Waived 280G Benefits shall the modification will preserve to the greatest extent possible, the greatest economic benefit for the Executive as determined on an after-tax basis; (B) as a second priority, any amounts of the Transaction Payment that are contingent on future events (e.g., being terminated without Cause), will be made reduced (or provided.eliminated) before any amounts of the Transaction Payment that are not contingent on future events; and (C) as a third priority, any amounts of the Transaction Payment that are “deferred compensation” within the meaning of Section 409A will be reduced (or eliminated) before any amounts of the Transaction Payment that are not deferred compensation within the meaning of Section 409A.
Appears in 1 contract
Section 280G. To Notwithstanding anything in this Agreement or otherwise to the extent contrary, in the event that any “disqualified individual” with respect to payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Issuer, the Company or any member of the Company Group, or any entity that effectuates a change of control (or any of its Affiliates affiliates) to or for the benefit of the Employee (whether pursuant to the terms of this Agreement or any other plan, equity-based award, arrangement, agreement or otherwise) (all such payments, awards, benefits and/or distributions being hereinafter referred to as the “Total Payments”) would be subject to the excise tax under Section 4999 of the Code (or any successor provision) (the “Excise Tax”), then:
a. If no “stock” of the Company Group is then “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(c280G(b)(5)(A)(ii)(I) of the Code and Code, prior to the regulations thereunderclosing of the applicable transaction, the Company (or the applicable corporation undergoing a change in control) would receive shall make good faith efforts to obtain shareholder approval of the Total Payments, such that upon shareholder approval, such portion of the Total Payments shall be not subject to the Excise Tax. The Employee shall fully cooperate to ensure that such shareholder approval of all such Total Payments is valid (including by executing all required waivers). Failure to obtain such shareholder approval following good faith efforts of the Company (or the applicable corporation undergoing a change in control) shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax. In addition, the Employee can voluntarily decide not to execute the waiver, in which case the failure of the Company (or benefits the applicable corporation undergoing a change in control) to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax.
b. In the event that would reasonably be expected to constitute (i) the shareholder approval described in Section 19(a) is not obtained or (ii) the “parachute paymentsstock” (of the Company Group is “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(2)(A280G(b)(5)(A)(ii)(I) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Dateextent necessary to make such portion of the Total Payments not subject to the Excise Tax, use reasonable best efforts to obtain from each such “disqualified individual” a waiver the portion of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so Total Payments that any remaining payments and/or benefits shall do not be deemed to be “parachute payments” (constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with any such reduction being made as follows: cash payments being reduced before equity-based compensation or other non-cash compensation or benefits, in each case, in reverse order beginning with payments or benefits that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code and Code; provided that, in the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote case of holders all of the equity interests of the Company entitled foregoing Total Payments, all amounts that are not subject to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefitscalculation under Treas. Prior to soliciting such waivers and approvalReg. §1.280G-1, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”Q&A-24(b) or (iic) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) as would result in no portion of the payments being considered “excess parachute payments” under Section 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedof the Code.
Appears in 1 contract
Samples: Employment Agreement (Duck Creek Technologies, Inc.)
Section 280G. (a) Notwithstanding anything in this Agreement to the contrary, in the event it will be determined that any payment or distribution by the Equity Group to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if paid, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, prior to the making of any Payments to Executive, a calculation will be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under clause (i) of the (initials) ___JC_____ - 9 - FILENAME \* MERGEFORMAT 00031247.DOCX immediately preceding sentence is less than the amount calculated under clause (ii) thereof, then the Payments will be limited to the extent necessary to avoid triggering the Excise Tax (the “Reduced Amount”).
(b) The reduction of the Payments, if applicable, will be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the Change of Control, as determined by the accounting firm that was the Bank’s independent auditor immediately before the Change of Control (the “Determination Firm”). For purposes of this Section 7, present value will be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 7, the “Parachute Value” of a Payment means the present value as of the date of the Change of Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(c) All determinations required to be made under this Section 7, including whether an Excise Tax would otherwise be imposed, whether the Payments will be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, will be made by the Determination Firm, which will provide detailed supporting calculations both to the Bank and Executive within fifteen (15) business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by the Bank. All fees and expenses of the Determination Firm will be borne solely by the Bank. Any determination by the Determination Firm will be binding upon the Bank and Executive.
(d) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that amounts will have been paid or distributed by the Equity Group to or for the benefit of Executive that should not have been so paid or distributed (an “Overpayment”) or that additional amounts that will have not been paid or distributed by the Equity Group to or for the benefit of Executive could have been so paid or distributed (an “Underpayment”). In the event that the Determination Firm, based upon the assertion of a deficiency by the Internal Revenue Service against the Equity Group or Executive that the Determination Firm believes has a high probability of success determines that an Overpayment has been made, any such Overpayment paid or distributed by the Equity Group to or for the benefit of Executive will be repaid by Executive to the appropriate member of the Equity Group together with interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, however, that no such repayment will be required if and to the extent such deemed repayment would not either reduce the amount on which Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Determination Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment will be promptly paid by the Equity Group to or for the benefit of Executive, together with interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code, but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(e) To the extent that any “disqualified individual” requested by Executive, the Bank will cooperate with respect the Executive in good faith in valuing, and the Determination Firm will take into account the value of, services provided or to be provided by Executive (including Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant) before, on or after the Company date of a change in ownership or any control of its Affiliates Parent or the Bank (within the meaning of Section 280G(cQ&A-2(b) of the Code and final regulations under Section 280G of the regulations thereunderCode), such that payments in respect of such services (initials) would receive any payments or benefits that would reasonably ___JC_____ - 10 - FILENAME \* MERGEFORMAT 00031247.DOCX may be expected to constitute “parachute payments” (considered reasonable compensation within the meaning of Section 280G(b)(2)(A) Q&A-9 and Q&A-40 to Q&A-44 of the Code and the final regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of under Section 280G of the Code and and/or exempt from the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders definition of the equity interests term “parachute payment” within the meaning of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(iiQ&A-2(a) of the Code and any final regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived under Section 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited Code in accordance with the foregoing provisions of this Section 7.11 and that either (iQ&A-5(a) the requisite number of votes of holders of the equity interests final regulations under Section 280G of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedCode.
Appears in 1 contract
Section 280G. To (a) Notwithstanding anything in this Agreement to the extent contrary, in the event that any payment or benefit received or to be received by Executive (including any payment or benefit received in connection with a “disqualified individualChange in Control” with respect (as defined in the Brookdale Senior Living Inc. Omnibus Stock Incentive Plan) or the termination of Executive’s employment or consultancy, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits being hereinafter referred to as the “Total Payments”) would not be deductible (in whole or part) by the Company or any of its subsidiaries or Affiliates (within the meaning making such payment or providing such benefit as a result of Section 280G(c) 280G of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts extent necessary to obtain from each make such “disqualified individual” a waiver portion of such disqualified individual’s rights to some or all of such payments or benefits the Total Payments deductible (and after taking into account any reduction in the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning Total Payments provided by reason of Section 280G of the Code and in such other plan, arrangement or agreement), the regulations thereunderportion of the Total Payments that do not constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero).
(b) For purposes of this limitation, (i) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no later than two portion of the Total Payments shall be taken into account which, in the opinion of tax counsel (2“Tax Counsel”) Business Days reasonably acceptable to Executive and selected by the accounting firm which was, immediately prior to the Closing DateChange in Control, with respect to each individual who agrees to the waiver described in clause Company’s independent auditor (ithe “Auditor”), submit to does not constitute a vote of holders of “parachute payment” within the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements meaning of Section 280G(b)(5)(B)(ii280G(b)(2) of the Code and any regulations promulgated thereunderCode, including by reason of Section 280G(b)(4)(A) of the Code; (iii) the right of any such “disqualified individual” severance payments payable to receive the Waived 280G Benefits. Prior Executive pursuant to soliciting such waivers and approval, the Company Section 5 hereof shall provide drafts of such waivers and disclosure and approval materials be reduced only to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior necessary so that the Total Payments (other than those referred to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either clauses (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) of this paragraph) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions by reason of Section 280G Approval was not obtainedof the Code, and, as a result, no Waived 280G Benefits in the opinion of Tax Counsel; and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be made determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
(c) If it is established pursuant to a final determination of a court of competent jurisdiction or providedan Internal Revenue Service proceeding that, notwithstanding the good faith of Executive and the Company in applying the terms of this Section 7, the Total Payments paid to or for Executive’s benefit are in an amount that would result in any portion of such Total Payments being subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, if such repayment would result in (i) no portion of the remaining Total Payments being subject to the Excise Tax and (ii) a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, the Executive shall have an obligation to pay the Company upon demand an amount equal to the sum of (x) the excess of the Total Payments paid to or for Executive’s benefit over the Total Payments that could have been paid to or for Executive’s benefit without any portion of such Total Payments being subject to the Excise Tax; and (y) interest on the amount set forth in clause (x) of this sentence at the rate provided in Section 1274(b)(2)(B) of the Code from the date of Executive’s receipt of such excess until the date of such payment.
Appears in 1 contract
Samples: Employment Agreement (Brookdale Senior Living Inc.)
Section 280G. To the extent that any necessary to avoid the application of Section 280G of the Code and the Treasury Regulations thereunder, as soon as reasonably practicable following the Signing Date, but in no event later than five (5) Business Days prior to the Closing Date, the Company shall (i) use commercially reasonable efforts to obtain waivers (with such waivers to be provided to Purchaser for review and comment as provided for herein) from each Person who is a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code 280G and the regulations thereunder) would receive who has a right to any payments or benefits as a result of or in connection with the transactions contemplated by this Agreement that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) 280G of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior as to the Closing Date, use reasonable best efforts to obtain from each which such “disqualified individual” a waiver of such disqualified individual’s Person waives his or her rights to some or all of such payments or benefits (the “Waived 280G Benefits”) applicable to such Person so that any all remaining payments and/or or benefits applicable to such Person shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderCode), and (ii) no later than two (2) Business Days prior to following the Closing Date, with respect to each individual who agrees to execution of the waiver waivers described in clause (i), submit solicit the approval of the necessary equityholders of the Group Companies of any Waived 280G Benefits pursuant to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy that meets the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and the Treasury Regulations thereunder. At least five (5) Business Days prior to obtaining any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to waiver or soliciting such waivers and equityholder approval, the Company shall provide drafts Purchaser with copies of such all Section 280G-related documents, including, without limitation, any analysis relating to the payments subject to Section 280G of the Code prepared by the Company, the disclosure document, waivers and disclosure and approval materials to Parent consents, for its Purchaser’s review and approval (approval, which approval will shall not be unreasonably withheld, conditioned withheld or delayed) no later than four (4) Business Days prior to soliciting such waivers , and soliciting such approvalshall accept all reasonable and timely comments made thereto by Purchaser. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing Date, the Company shall deliver to Parent Purchaser evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 6.25 and that either (iA) the requisite number of votes of holders of the equity interests of the Company was were obtained with respect to the Waived 280G Benefits (the “Section 280G Approval”) ), or (iiB) that the Section 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided. Notwithstanding the foregoing, (x) in no event shall this Section 6.25 be construed to require the Company to compel any person to waive any existing rights and in no event shall the Company be deemed in breach of this Section 6.25 if any such person refuses to waive any such rights and (y) any Section 280G analysis and/or disclosure shall only include information regarding arrangements entered into with Purchaser or its Affiliates to the extent such arrangements have been disclosed to the Company prior to the date any waivers have been obtained.
Appears in 1 contract
Section 280G. To Between the extent date hereof and the Closing Date, the Company will use prompt and commercially reasonable efforts (which efforts shall not, for clarity, include the requirement to offer or provide any additional value or any other financial accommodation to any Person) to obtain waivers and solicit shareholder approval of any payments that any may, separately or in the aggregate, constitute “excess parachute payments” (within the meaning of Section 280G of the Code) that may be made to individuals who are “disqualified individualindividuals” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits in connection with the transactions contemplated by this Agreement, such that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall would not be deemed to be constitute “excess parachute payments” pursuant to Section 280G of the Code; provided that, for clarity, Company shall not be in breach of this covenant solely as a result of the refusal of any disqualified individual to waive the applicable payments and submit them to the applicable stockholder vote and/or as a result of the requisite shareholder approval not to be obtained; provided, that the Company shall immediately notify Purchaser of either such circumstance. The Company will provide drafts of the waiver, disclosure and consent documentation associated with the foregoing at least seven (7) calendar days prior to the intended dissemination thereof and will consider in good faith any comments of Purchaser thereto that are provided to the Company at least one (1) calendar day prior to such intended dissemination. Notwithstanding the foregoing, to the extent that any contract, agreement, or plan is or is contemplated to be entered into by Purchaser, the Surviving Company or any of their Affiliates and a disqualified individual who has been identified to Purchaser as such in connection with the transactions contemplated by this Agreement before the Closing Date (the “Purchaser Arrangements”), which may reasonably constitute or require a payment to such disqualified individual that is contingent upon a change in control within the meaning the Section 280G of the Code, Purchaser shall provide a copy of such contract, agreement or plan to the Company and the Sellers’ Representative at least fifteen (15) days before the Closing Date and shall cooperate with the Company in good faith in order to calculate or determine the value (for the purposes of Section 280G of the Code and Code) of any payments or benefits granted or contemplated therein, which may be paid or granted in connection with the regulations thereunder)transactions contemplated by this Agreement that could constitute a “parachute payment” under Section 280G of the Code; provided that, and (ii) no later than two (2) Business Days in any event, the Company’s failure to include any Purchaser Arrangements which are not communicated to the Company prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders intended dissemination of the equity interests disclosure and consent documentation in the stockholder voting materials described herein will not result in a breach of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited covenants set forth in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided4.8.
Appears in 1 contract
Section 280G. To (a) The Company and each of its Subsidiaries shall use commercially reasonable efforts to obtain, prior to the initiation of the equityholder approval procedure described in Section 7.04(c), from each Person to whom any payment or benefit is required or proposed to be made that could constitute “parachute payments” under Section 280G(b)(2) of the Code and Treasury Regulations promulgated thereunder (“Section 280G Payments”), a written agreement waiving such Person’s right to receive some or all of such payment or benefit (the “Waived Benefits”), to the extent necessary so that all remaining payments and benefits applicable to such Person shall not be deemed a parachute payment, and accepting in substitution for the Waived Benefits the right to receive the Waived Benefits only if approved by the equityholders of the Company and its applicable Subsidiaries in a manner that complies with Section 280G(b)(5)(B) of the Code and the Treasury Regulations issued thereunder.
(b) In connection with the foregoing, Parent shall provide the Representative with all information and documents necessary to allow the Company and each of its Subsidiaries to determine whether any payments made or to be made or benefits granted or to be granted pursuant to any employment agreement or other agreement, arrangement or contract entered into or negotiated by Parent, Merger Sub or any of their respective Affiliates (“disqualified individualParent Payments”), together with all Section 280G Payments, could reasonably be considered to be “parachute payments” within the meaning of Section 280G(b)(2) of the Code at least ten (10) Business Days prior to the Closing Date (and shall further provide any such updated information as is necessary prior to the Closing Date).
(c) Prior to the Closing, the Company and each of its Subsidiaries shall use its commercially reasonable efforts to obtain the approval by such number of equityholders of the Company in a manner that complies with respect the terms of Section 280G(b)(5)(B) of the Code and the Treasury Regulations thereunder, including Q-7 of Section 1.280G-1 of such Treasury Regulations, of the right of each Person described in Section 7.04(a) to receive or retain, as applicable, such Person’s Waived Benefits; provided that in no event shall this Section 7.04 be construed to require the Company or any of its Affiliates Subsidiaries to compel any Person to waive any existing rights under any contract or agreement that such Person has with the Company, such Subsidiary or any other Person, and in no event shall the Company or any of its Subsidiaries be deemed in breach of this Section 7.04 if any such Person refuses to waive any such rights or if the equityholders fail to approve any Waived Benefits.
(within d) Notwithstanding anything to the meaning contrary in this Section 7.04 or otherwise in this Agreement, to the extent Parent has provided material misinformation, or Parent’s omission of Section 280G(c) information has resulted in material misinformation, with respect to any Parent Payments, and such omission of information or misinformation results in the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute payment of “excess parachute payments” (within the meaning of Section 280G(b)(2)(A280G(b)(1) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations Treasury Regulation thereunder), and (ii) there shall be no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders breach of the equity interests of representation contained in Section 5.09 or the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedcovenant contained herein.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Cognizant Technology Solutions Corp)
Section 280G. To Notwithstanding anything in this Agreement or otherwise to the extent contrary, in the event that any “disqualified individual” with respect to payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Issuer, the Company or any member of the Company Group, or any entity that effectuates a change of control (or any of its Affiliates affiliates) to or for the benefit of the Employee (whether pursuant to the terms of this Agreement or any other plan, equity-based award, arrangement, agreement or otherwise) (all such payments, awards, benefits and/or distributions being hereinafter referred to as the “Total Payments”) would be subject to the excise tax under Section 4999 of the Code (or any successor provision) (the “Excise Tax”), then:
(a) If no “stock” of the Company Group is then “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(c280G(b)(5)(A)(ii)(1) of the Code and Code, prior to the regulations thereunderclosing of the applicable transaction, the Company (or the applicable corporation undergoing a change in control) would receive shall make good faith efforts to obtain shareholder approval of the Total Payments, such that upon shareholder approval, such portion of the Total Payments shall be not subject to the Excise Tax. The Employee shall fully cooperate to ensure that such shareholder approval of all such Total Payments is valid (including by executing all required waivers). Failure to obtain such shareholder approval following good faith efforts of the Company (or the applicable corporation undergoing a change in control) shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax. In addition, the Employee can voluntarily decide not to execute the waiver, in which case the failure of the Company (or benefits the applicable corporation undergoing a change in control) to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax.
(b) in the event that would reasonably be expected to constitute (i) the shareholder approval described in Section 19(a) is not obtained or (ii) the “parachute paymentsstock” (of the Company Group is “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(2)(A280G(b)(5)(A)(ii)(I) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Dateextent necessary to make such portion of the Total Payments not subject to the Excise Tax, use reasonable best efforts to obtain from each such “disqualified individual” a waiver the portion of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so Total Payments that any remaining payments and/or benefits shall do not be deemed to be “parachute payments” (constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with any such reduction being made as follows: cash payments being reduced before equity-based compensation or other non-cash compensation or benefits, in each case, in reverse order beginning with payments or benefits that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code, provided that, in the case of all of the foregoing Total Payments, all amounts that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) as would result in no portion of the payments being considered “excess parachute payments” under Section 280G of the Code.
(c) Section 19(b) shall not apply and no reduction of Total Payments will occur if (i) clause 19(b)(ii) is applicable and (ii) (1) the net amount of such Total Payments, as reduced pursuant to Section 19(b) (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is less than (2) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of excise tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(d) Any determinations that are made pursuant to this Section 19 shall be made by a nationally recognized certified public accounting firm that shall be selected by the Company (and paid by the Company) prior to any transaction that is subject to Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G ApprovalAccountant”) or (ii) the 280G Approval was not obtained), and, as a result, no Waived 280G Benefits which determination shall be made or providedcertified by the Accountant and set forth in a certificate delivered to the Employee setting forth in reasonable detail the basis of the Accountant’s determinations.
Appears in 1 contract
Samples: Employment Agreement (Duck Creek Technologies, Inc.)
Section 280G. To the extent that any “disqualified individual” with respect (a) The Company and each of its Subsidiaries shall use commercially reasonable efforts to seek, prior to the Company initiation of the equityholder approval procedure described in Section 7.04(c), from each Person to whom any payment or any of its Affiliates (within the meaning of benefit is required or proposed to be made that could constitute “parachute payments” under Section 280G(c280G(b)(2) of the Code and the regulations thereunder) would Treasury Regulations promulgated thereunder (“Section 280G Payments”), a written agreement waiving such Person’s right to receive any some or all of such payment or benefit (the “Waived Benefits”), to the extent necessary so that all remaining payments or and benefits applicable to such Person shall not be deemed a parachute payment, and accepting in substitution for the Waived Benefits the right to receive the Waived Benefits only if approved by the equityholders of the Company and its applicable Subsidiaries in a manner that would reasonably be expected to constitute “parachute payments” (within the meaning of complies with Section 280G(b)(2)(A280G(b)(5)(B) of the Code and the regulations Treasury Regulations issued thereunder, then.
(b) In connection with the foregoing, the Purchaser shall provide the Representative with all information and documents necessary to allow the Company will and each of its Subsidiaries to determine whether any payments made or to be made or benefits granted or to be granted pursuant to any employment agreement or other agreement, arrangement or contract entered into or negotiated by the Purchaser, the Merger Sub or any of their respective Affiliates, together with all Section 280G Payments, could reasonably be considered to be “parachute payments” within the meaning of Section 280G(b)(2) of the Code at least five (i) no later than four (45) Business Days prior to the Closing Date (and shall further provide any such updated information as is necessary prior to the Closing Date).
(c) Prior to the Closing, the Company and each of its Subsidiaries shall use its commercially reasonable best efforts to obtain from each the approval by such “disqualified individual” number of equityholders of the Company in a waiver of such disqualified individual’s rights to some or all of such payments or benefits (manner that complies with the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning terms of Section 280G 280G(b)(5)(B) of the Code and the regulations Treasury Regulations thereunder), including Q-7 of Section 1.280G-1 of such Treasury Regulations, of the right of each Person described in Section 7.04(a) to receive or retain, as applicable, such Person’s Waived Benefits, provided, that in no event shall this Section 7.04 be construed to require the Company or any of its Subsidiaries to compel any Person to waive any existing rights under any contract or agreement that such Person has with the Company, any Subsidiary of the Company or any other Person, and in no event shall the Company or any of its Subsidiaries be deemed in breach of this Section 7.04 if any such Person refuses to waive any such rights or if the equityholders fail to approve any Waived Benefits.
(iid) Copies of all materials produced by the Company in connection with the equityholder approval contemplated by this Section 7.04 (including the form of waiver agreement and equityholder disclosure statement) shall be provided to the Purchaser no later less than two three (23) Business Days prior in advance of the circulation of the waiver agreements to the Closing DatePersons requested to execute them, with respect to each individual who agrees and the form and substance of all such materials shall be subject to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and Purchaser’s approval, the Company shall provide drafts of such waivers and disclosure and approval materials not to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned withheld or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided.
Appears in 1 contract
Samples: Merger Agreement (Hubbell Inc)
Section 280G. To The Company shall (a) prior to the extent that any Closing Date, solicit and use reasonable best efforts to obtain from each “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the any regulations promulgated thereunder) would who could otherwise receive or retain any payments payment or benefits that would reasonably be expected to could constitute a “parachute paymentspayment” (within the meaning of Section 280G(b)(2)(A) of the Code and the any regulations promulgated thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining no payments and/or or benefits shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the any regulations promulgated thereunder), ) and (iib) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), Date submit to a shareholder vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy satisfying the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalapproval materials, the Company shall provide drafts of such the calculations, waivers and disclosure and approval materials to Parent CBRG for its review and approval comment at least five (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (45) Business Days prior to soliciting such waivers and soliciting such approval, and the Company shall consider incorporation of any comments provided by CBRG in good faith. If any of the Waived 280G Benefits fail to be approved in accordance with the requirements of Section 280G(b)(5)(B) of the Code as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing DateClosing, if there are any Waived 280G Benefits, the Company shall deliver to Parent CBRG evidence reasonably acceptable to Parent CBRG that a vote of holders of the equity interests of the Company shareholders was solicited in accordance with the foregoing provisions of this Section 7.11 5.21 and that either (i) the requisite number of votes of holders of the equity interests of the Company shareholders was obtained with respect to the Waived 280G Benefits (the “280G ApprovalAp p roval”) or (ii) the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made retained or provided.
Appears in 1 contract
Samples: Business Combination Agreement (Alterola Biotech Inc.)
Section 280G. To the extent that any necessary to avoid the application of Section 280G of the Code and the Treasury Regulations thereunder, as soon as reasonably practicable following the date of this Agreement, but in no event later than five (5) Business Days prior to the Closing Date, the Company shall (i) use commercially reasonable efforts to obtain waivers (with such waivers to be provided to Purchaser for review and comment as provided for herein) from each Person who is a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code 280G and the regulations thereunder) would receive who has a right to any payments or benefits as a result of or in connection with the transactions contemplated by this Agreement that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) 280G of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior as to the Closing Date, use reasonable best efforts to obtain from each which such “disqualified individual” a waiver of such disqualified individual’s Person waives his or her rights to some or all of such payments or benefits (the “Waived 280G Benefits”) applicable to such Person so that any all remaining payments and/or or benefits applicable to such Person shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderCode), and (ii) no later than two (2) Business Days prior to following the Closing Date, with respect to each individual who agrees to execution of the waiver waivers described in clause (i), submit solicit the approval of the necessary equityholders of the Group Companies of any Waived 280G Benefits pursuant to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy that meets the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and the Treasury Regulations thereunder. At least five (5) Business Days prior to obtaining any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to waiver or soliciting such waivers and equityholder approval, the Company shall provide drafts Purchaser with copies of such all Section 280G-related documents, including, without limitation, any analysis relating to the payments subject to Section 280G of the Code prepared by the Company, the disclosure document, waivers and disclosure and approval materials to Parent consents, for its Purchaser’s review and approval (approval, which approval will shall not be unreasonably withheld, conditioned withheld or delayed) no later than four (4) Business Days prior to soliciting such waivers , and soliciting such approvalshall accept all reasonable and timely comments made thereto by Purchaser. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing Date, the Company shall deliver to Parent Purchaser evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 Section 6.25 and that either (iA) the requisite number of votes of holders of the equity interests of the Company was were obtained with respect to the Waived 280G Benefits (the “Section 280G Approval”) ), or (iiB) that the Section 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided. Notwithstanding the foregoing, (x) in no event shall this Section 6.25 be construed to require the Company to compel any person to waive any existing rights and in no event shall the Company be deemed in breach of this Section 6.25 if any such person refuses to waive any such rights and (y) any Section 280G analysis and/or disclosure shall only include information regarding arrangements entered into with Purchaser or its Affiliates to the extent such arrangements have been disclosed to the Company prior to the date any waivers have been obtained.
Appears in 1 contract
Section 280G. To If required to avoid the extent that any “disqualified individual” with respect imposition of Taxes under Section 4999 of the Code or the loss of a deduction to the Company or any of its Affiliates Subsidiaries under Section 280G of the Code, in each case, with respect to any payment or benefit arising in connection with the transactions contemplated by this Agreement, prior to the Closing, the Company shall (i) solicit a waiver from each “disqualified individual” (within the meaning of Section 280G(c) of the Code) entitled to receive a payment that is reasonably expected to be a “parachute payment” (within the meaning of Section 280G(b)(2) of the Code) in connection with the transactions contemplated by this Agreement of his or her right to receive such payment or benefit (a “280G Waiver”), and (ii) cause the Company to deliver to the holders of Common Stock a disclosure statement, that is reasonably intended to satisfy its disclosure obligations under Section 280G(b)(5)(B) of the Code and the regulations thereunder, and which solicits approval by the Company Stockholders (“280G Shareholder Approval”), in a manner that is reasonably intended to comply with Section 280G(b)(5)(B) would of the Code and the regulations thereunder, of the right of any “disqualified individual” (as defined in Section 280G(c) of the Code) to receive or retain any payments or benefits that would reasonably be expected expected, in the absence of such approval by such Company Stockholders, to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A280G(b)(2) of the Code and Code); provided that such 280G Waiver shall not be required to include any payments or benefits that may be made by Parent or any of its Affiliates pursuant to arrangements entered into at the regulations thereunderdirection of Parent on or before the Closing, thenunless at least seven (7) calendar days prior to the Closing, the Company will (i) no later than four (4) Business Days Parent provides, with respect to any agreement, contract or arrangement that Parent or its Affiliates are providing or entering into on or prior to the Closing DateDate to or with respect to any disqualified individual in connection with the transactions contemplated hereby, use reasonable best efforts to obtain from each a written description, satisfying the adequate disclosure requirements of Section 280G(b)(5)(B)(ii) of the Code, of any such agreement, contract or arrangement and amount of related “disqualified individualparachute payment.” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed Documentation to be “parachute payments” (within submitted to the meaning of Section 280G holders of the Code and Company Common Stock shall be distributed as soon as practicably possible, but in any event by the regulations thereunder), and (ii) no later than date that is two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalsubmission to the holders of Company Common Stock, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review copies of all material documents prepared by the Company in connection with this Section 5.08 and approval Parent shall have not less than three (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (43) Business Days prior to soliciting review and comment on all such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated abovedocuments, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, which comments the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited consider in accordance with the foregoing provisions of this Section 7.11 good faith and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedunreasonably omit.
Appears in 1 contract
Section 280G. To In the extent event it shall be determined that any “disqualified individual” with respect to payment or distribution by the Company or any of its Affiliates affiliates to or for the benefit of Executive (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments whether paid or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior payable or distributed or distributable pursuant to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver terms of such disqualified individual’s rights to some this Agreement or all of such payments or benefits otherwise) (the “Waived 280G BenefitsTotal Payments”), is or will be subject to the excise tax (the “Excise Tax”) so imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then the Total Payments shall be reduced to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the net after-tax benefit to Executive after reducing Executive’s Total Payments to the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax) benefit to Executive without such reduction. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the cash payments made pursuant to Section 5(a)(ii) of this Agreement, then to the payment made pursuant to Section 5(a)(iii) of this Agreement, then to any remaining payment made pursuant to Section 5(a)(iv) of this Agreement, then to any payment made pursuant to Section 5(a)(v) of this Agreement, and then to any other payment that triggers such Excise Tax in the following order:(i) reduction of cash payments; (ii) cancellation of accelerated vesting of performance-based equity awards (based on the reverse order of the date of grant); (iii) cancellation of accelerated vesting of other equity awards (based on the reverse order of the date of grant); and (iv) reduction of any other payments and/or due to Executive (with benefits shall not be deemed or payments in any group having different payment terms being reduced on a pro-rata basis). All mathematical determinations, and all determinations as to be whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code Code), that are required to be made under this paragraph, including determinations as to whether the Total Payments to Executive shall be reduced to the Safe Harbor Cap and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail assumptions to be approved as contemplated aboveutilized in arriving at such determinations, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedat the Company’s expense by a nationally recognized accounting firm mutually acceptable to the Company and Executive.
Appears in 1 contract
Samples: Employment Agreement (Williams Industrial Services Group Inc.)
Section 280G. To If any individual may receive any payment or benefit that individually or in the extent that any aggregate would be a “disqualified individualparachute payment” with respect to the Company or any of its Affiliates (within the meaning of under Section 280G(c) 280G of the Code and in connection with the regulations thereundertransactions contemplated by this Agreement (either alone or in combination with any other event), then no later than five (5) would receive any payments or benefits that would reasonably be expected calendar days prior to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, thenClosing, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to shall obtain an enforceable written waiver from each such “disqualified individual” a waiver of such disqualified individual’s , pursuant to which the individual shall have irrevocably waived his or her rights to some or all of such payments and benefits so that all remaining payments and benefits applicable to such individual shall not individually or benefits in the aggregate constitute a “parachute payment” (such waived payments and benefits, the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within ). Promptly following the meaning execution of Section 280G of the Code and the regulations thereunder)such waivers, and in all events not less than three (ii3) no later than two (2) Business Days calendar days prior to the Closing DateClosing, with respect to each individual who agrees to the waiver described in clause (i), submit to Company shall solicit a vote of the Waived 280G Benefits from its equity holders of in the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of manner provided under Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefitsits associated Treasury Regulations. Prior to soliciting such waivers and approvalvote, the Company shall provide drafts a draft of such waivers and disclosure such equity holder vote solicitation materials (together with all calculations and approval materials supporting documentation) to Parent Purchaser for its Purchaser’s review and approval (approval, which approval will shall not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If To the extent that any of the Waived 280G Benefits fail to be are not approved by the equity holders as contemplated above, prior to the Closing, such Waived 280G Benefits shall not be made or providedprovided in any manner. To the extent applicable, prior Prior to the Closing DateClosing, the Company shall deliver to Parent Purchaser evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company holders was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (ia) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) ), or (iib) the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided.
Appears in 1 contract
Samples: Stock Purchase Agreement (Universal Technical Institute Inc)
Section 280G. To Prior to the Closing, to the extent that any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderand guidance promulgated thereunder (collectively, “Section 280G”)) has the right to receive or retain any payments or benefits in connection with the transactions contemplated by this Agreement that reasonably would be expected to constitute “parachute payments” (within the meaning of Section 280G), the Group Companies will (a) solicit and use commercially reasonable efforts to obtain, from each such person whom the Group Companies reasonably believe is a “disqualified individual,” a waiver of all or a portion of such disqualified individual's rights or potential rights to any such payments and/or benefits (the “Waived 280G Benefits”), such that none of the remaining payments and/or benefits applicable to such disqualified individual would be deemed to be “excess parachute payments” pursuant to Section 280G, and (iib) no later than two (2) Business Days prior to the Closing Datethereafter, with respect to each disqualified individual who agrees to executes the waiver described in clause (ia), submit for approval the right of any such disqualified individual to receive or retain the Waived 280G Benefits to a vote of the holders of the equity interests of the Company applicable member of the Group Companies entitled to vote on such matters (along with adequate disclosure matters, in the manner intended to satisfy the requirements of under Section 280G(b)(5)(B)(ii280G(b)(5) of the Code and any the regulations and guidance promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval At least five (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (45) Business Days prior to soliciting such the waivers and soliciting such approval. If any of the Waived 280G Benefits fail Benefits, the Group Companies shall provide to Buyer drafts of the waivers, disclosure and other approval materials and Section 280G calculations for Buyer’s review and comment. To the extent that any Contract, agreement, plan or arrangement is entered into (or planned to be approved as entered into) by, or at the direction of, Buyer, Parent and/or any of their respective Affiliates and a disqualified individual at or prior to Closing (the “Buyer Arrangements”), Buyer shall provide a copy of such Contract, agreement, plan or arrangement to the Company at least seven (7) Business Days before the Closing and cooperate with the Group Companies in good faith in order to calculate or determine the value (for purposes of Section 280G) of any payments or benefits granted or contemplated abovetherein that may constitute, such Waived 280G Benefits shall individually or in the aggregate with other payments and/or benefits, “parachute payments”; provided that the Group Companies’ failure to include the Buyer Arrangements in the equityholder voting materials described herein, due to Buyer’s breach of its obligations set forth herein, will not be made or providedresult in a breach of this Section 6.18. To the extent applicable, at least one (1) Business Day prior to the Closing DateClosing, the Company shall Group Companies will deliver to Parent Buyer evidence reasonably acceptable satisfactory to Parent Buyer that a vote of holders of the equity interests of the Company applicable member of the Group Companies was solicited in accordance with the foregoing provisions of this Section 7.11 6.18 and that either (i) the requisite number of votes of holders of the equity interests of the Company applicable member of the Group Companies was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained. If such 280G Approval is not obtained, and, as then any disqualified individual who executed a result, no waiver with respect to his or her Waived 280G Benefits shall will not be made entitled to receive or providedretain his or her Waived 280G Benefits.
Appears in 1 contract
Section 280G. To As soon as reasonably practicable following the extent that any “disqualified individual” with respect to the Company or any date of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunderthis Agreement, then, the Company will (i) but in no event later than four three (43) Business Days prior to the Closing Date, the Company shall use reasonable its best efforts to (a) obtain waivers from each Person who has a right to any payments and/or benefits as a result of or in connection with the transactions contemplated by this Agreement that would be deemed to constitute “parachute payments” within the meaning of Section 280G of the Code and as to which such “disqualified individual” a waiver of such disqualified individual’s Person waives his or her rights to some or all of such payments or and/or benefits (the “Waived 280G Benefits”) applicable to such Person so that any all remaining payments and/or benefits applicable to such Person shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderCode), and (iib) no later than two (2) Business Days prior to following the Closing Date, with respect to each individual who agrees to execution of the waiver waivers described in clause (ia), submit to a vote of holders solicit the approval of the equity interests stockholders of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of extent and in the manner required under Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalapprovals, the Company shall provide drafts copies of such waivers and disclosure and such stockholder approval materials to Parent for its the Buyer. Buyer shall be provided with a reasonable period of time to review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting comment on such waivers and soliciting such approvalstockholder approval materials, provided further that the Company shall consider any comments provided by the Buyer in good faith. If To the extent any of the Waived 280G Benefits fail to be were not approved by the equity holders of the Company as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing Date, the Company shall deliver to Parent the Buyer evidence reasonably acceptable to Parent that a vote of holders of the equity interests stockholders of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 6.6 and that either (i) the requisite number of votes of holders of the equity interests of the Company was were obtained with respect to the Waived 280G Benefits (the “280G Approval”) ), or (ii) that the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided. The Seller Indemnitors shall indemnify Buyer for any deductions of the Group Companies disallowed pursuant to Section 280G of the Code and the applicable final Treasury Regulations and rulings thereunder. The value of any deductions indemnifiable hereunder shall be calculated assuming a 40% tax rate.
Appears in 1 contract
Section 280G. To Not less than three (3) Business Days prior to the extent Closing Date, the Company shall submit to the Stockholders for approval (in a manner and with disclosure documentation reasonably satisfactory to Parent) by a vote of such Stockholders as is required pursuant to Section 280G(b)(5)(B) of the Code and the Treasury Regulations issued thereunder (the “280G Stockholder Vote”), any such payments or other benefits that any may, separately or in the aggregate, result in “parachute payments” within the meaning of Section 280G(b) of the Code (determined without regard to Section 280G(b)(4) of the Code) and the Treasury Regulations thereunder (the “280G Payments”), such that, if the 280G Stockholder Vote is received approving the 280G Payments, such 280G Payments shall not cause there to be “excess parachute payments” within the meaning of 280G(b)(1) of the Code and the Treasury Regulations thereunder. The 280G Stockholder Vote shall establish the right of each “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and (a “Disqualified Individual”) to receive or retain the regulations thereunder) would receive any payments or benefits that would reasonably 280G Payments. Prior to the 280G Stockholder Vote, the Company shall obtain, from each Disqualified Individual who might be expected to constitute “parachute receive a 280G Payment, a written, executed waiver (in a form reasonably satisfactory to Parent), pursuant to which such Disqualified Individual agrees to waive any and all rights to any payments” (within , to the meaning of extent such payments would cause the 280G Payments not to be deductible pursuant to Section 280G(b)(2)(A) 280G of the Code and (the regulations thereunder, then“280G Waivers”). Such 280G Waivers shall cease to have any force or effect with respect to any item covered thereby to the extent the 280G Stockholder Vote for such item is obtained. In addition, the Company will (i) no later than four (4) Business Days prior shall provide adequate disclosure to the Closing Date, use reasonable best efforts Stockholders (including to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of extent required by Section 280G of the Code and the regulations Treasury Regulations thereunder)) of all material facts concerning all payments to any such Disqualified Individual that, and but for the 280G Stockholder Vote, could be deemed “parachute payments” under Section 280G of the Code in a manner that satisfies Section 280G(b)(5)(B) (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated the Treasury Regulations thereunder) . Parent and its counsel shall be provided with drafts of the right of any such “disqualified individual” to receive the Waived disclosure statement, 280G Benefits. Prior Waivers, and the consent to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent be signed by Stockholders referenced in this Section 5.13 for its review and approval (which approval will not before being finalized. Parent and its counsel shall also be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers provided copies of all documents executed by the Stockholders and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited Disqualified Individuals in accordance connection with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided.Stockholder Vote.
Appears in 1 contract
Samples: Merger Agreement (Ideanomics, Inc.)
Section 280G. To the extent that any “disqualified individual” with respect necessary to avoid the application of Section 280G of the Code, as soon as reasonably practicable following the date of this Agreement, but in no event later than two (2) calendar days prior to the Closing Date, the Company or any of its Affiliates shall (within the meaning of Section 280G(ci) of the Code and the regulations thereunder) would receive use reasonable best efforts to obtain waivers from each Person who has a right to any payments and/or benefits as a result of or benefits in connection with the transactions contemplated by this Agreement that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) 280G of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior pursuant to the Closing Date, use reasonable best efforts to obtain from each which such “disqualified individual” a waiver of such disqualified individual’s Person waives his or her rights to some or all of such payments or and/or benefits (the “Waived 280G Benefits”) applicable to such Person so that any all remaining payments and/or benefits applicable to such Person shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderCode), and (ii) no later than two following the execution of the waivers described in clause (2i), solicit the approval of the equityholders of the Company to the extent required under Section 280G(b)(5)(B) of the Code of any Waived 280G Benefits pursuant to a vote intended to meet the requirements of Section 280G(b)(5)(B) of the Code, and that shall be in a form reasonably satisfactory to Parent. For purposes of the forgoing, such waivers and approval shall include payments and benefits to be provided by Parent or its Affiliates to any “disqualified individual” only to the extent that Parent provides the Company, within ten (10) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i)recipients, submit to a vote of holders amounts and descriptions of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts material terms of such waivers payments and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approvalbenefits. If To the extent any of the Waived 280G Benefits fail to be were not approved by the equityholders of the Company as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests equityholders of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 6.13 and that either (iA) the requisite number of votes of holders of the equity interests of the Company was were obtained with respect to the Waived 280G Benefits (the “280G Approval”) ), or (iiB) that the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided.
Appears in 1 contract
Samples: Merger Agreement
Section 280G. To As expeditiously as possible following the extent that date hereof (and in any “disqualified individual” event no later than seven days prior to the Closing Date), the Company will provide to Parent calculations (and all relevant backup materials) with respect to the Company amount of payments and benefits which have been, will or any of its Affiliates may be received in connection with the transactions contemplated by this Agreement (within or which may be deemed under the meaning of Section 280G(capplicable regulations to have been received in connection with such transactions) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to which could constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior subject to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of restriction on deductions imposed under Section 280G of the Code and the regulations Treasury Regulations promulgated thereunder), and (ii) no later than two (2) Business Days prior which calculations will be subject to Parent’s approval. Prior to the Closing DateClosing, the Company and each of its Subsidiaries will (x) obtain, with respect to each individual who agrees applicable Key Employee, and (y) use reasonable efforts to obtain, with respect to each other applicable service provider, prior to the waiver described in clause (i), submit to a vote of holders initiation of the equity interests of the Company entitled stockholder approval procedure described below in this Section 6.8, from each such Person to vote on such matters (along with adequate disclosure intended to satisfy the requirements of whom any payment or benefit will or could be made that could constitute “parachute payments” under Section 280G(b)(5)(B)(ii280G(b)(2) of the Code and any regulations Treasury Regulations promulgated thereunder) thereunder (“Section 280G Payments”), a written agreement waiving such Person’s right to receive some or all of such payment or benefit (the “Waived Benefits”), to the extent necessary so that all remaining payments and benefits applicable to such Person will not be deemed a parachute payment subject to the deduction restrictions imposed by Section 280G of the Code, and accepting in substitution for the Waived Benefits the right of any such “disqualified individual” to receive the Waived 280G BenefitsBenefits only if approved by the stockholders of the Company in a manner that complies with Section 280G(b)(5)(B) of the Code and the Treasury Regulations promulgated thereunder. Prior to soliciting such waivers and approvalthe Closing, the Company shall provide drafts and each of its Subsidiaries will use its reasonable efforts to obtain the approval by such number of stockholders of the Company in a manner that complies with the terms of Section 280G(b)(5)(B) of the Code and the Treasury Regulations thereunder, including Q‑7 of Section 1.280G‑1 of such waivers and disclosure and approval materials Treasury Regulations, of the right of each Person described in this Section 6.8 who has executed the waiver described therein to receive or retain, as applicable, such Person’s Waived Benefits. The Company will provide Parent for its review and approval (advance copies of all documents and communications by which approval it intends to seek the waiver and approvals described in this Section 6.8 and will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such promptly provide Parent with copies of any executed waivers and soliciting such approval. If any evidence of the Waived 280G Benefits fail to be approved as stockholder approval contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of by this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided6.8.
Appears in 1 contract
Section 280G. To (a) If any payment or benefit (including payments and benefits pursuant to the extent Agreement) that any the Executive would receive in connection with a Change of Control or other transaction (the “disqualified individual” with respect to Transaction”) from the Company or otherwise (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for the sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of its Affiliates the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall 7. cause to be taken into account the value of all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (x) the Executive shall have no rights to any additional payments and/or benefits constituting the Transaction Payment, and (y) reduction in payments and/or benefits shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit to the Executive as determined in the paragraph. If more than one method of reduction will result in the same economic benefit, the portions of the Transaction Payment shall be reduced pro rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Transaction Payment being subject to taxes pursuant to Section 409A that would not or otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification will preserve to the greatest extent possible, the greatest economic benefit for the Executive as determined on an after-tax basis; (B) as a second priority, any amounts of the Transaction Payment that are contingent on future events (e.g., being terminated without Cause), will be reduced (or eliminated) before any amounts of the Transaction Payment that are not contingent on future events; and (C) as a third priority, any amounts of the Transaction Payment that are “deferred compensation” within the meaning of Section 409A will be reduced (or eliminated) before any amounts of the Transaction Payment that are not deferred compensation within the meaning of Section 409A. (b) Notwithstanding the foregoing, in the event that no stock of the Parent is readily tradeable on an established securities market or otherwise (within the meaning of Section 280G(c) 280G of the Code and Code) at the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) time of the Code Change of Control and to the regulations thereunder, thenextent allowable pursuant to Treas. Reg. §1.280G-1, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” Parent shall cause a waiver vote of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed shareholders to be held to approve the portion of the Transaction Payments that equals or exceeds three times (3x) the Executive’s “parachute paymentsbase amount” (within the meaning of Section 280G of the Code Code) (the “Excess Parachute Payments”) in accordance with Treas. Reg. §1.280G-1, and the regulations thereunder)Executive shall cooperate with such vote of shareholders, and (ii) no later than two (2) Business Days prior including the execution of any required documentation subjecting the Executive’s entitlement to all Excess Parachute Payments to such shareholder vote. In the Closing Date, with respect to each individual who agrees to event that the waiver described in clause (i), submit to Parent does not cause a vote of holders of shareholders to be held to approve all Excess Parachute Payments, the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of provisions set forth in Section 280G(b)(5)(B)(ii5.7(a) of the Code Agreement shall apply.
(c) Unless the Executive and the Company or otherwise agree in writing, any regulations promulgated thereunder) determination required under the right section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of any such “disqualified individual” to receive making the Waived calculations required by the section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G Benefitsand 4999 of the Code. Prior The Accountants shall provide detailed supporting calculations to soliciting such waivers the Company and approval, the Executive as requested by the Company or the Executive. The Executive and the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior furnish to the Closing Date, Accountants such information and documents as the Accountants may reasonably request in order to make a determination under the section. The Company shall deliver to Parent evidence bear all costs the Accountants may reasonably acceptable to Parent that a vote of holders of incur in connection with any calculations contemplated by the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedsection. 6.
Appears in 1 contract
Samples: Employment Agreement
Section 280G. To the extent that any “disqualified individual” with respect to the Company or (a) If any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably received or to be expected received by the Executive (including, without limitation, any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payments”) constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder), and (ii) no later than two (2) Business Days prior will be subject to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of excise tax imposed under Section 280G(b)(5)(B)(ii) 4999 of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G ApprovalExcise Tax”) or ), the Executive shall receive the greatest of the following, whichever gives the Executive the highest net after-tax amount (iiafter taking into account federal, state, local and social security taxes):
(1) the 280G Approval was not obtainedPayments, or
(2) one dollar less than the amount of the Payments that would subject the Executive to the Excise Tax (the “Safe Harbor Amount”). If a reduction in the 280G Payments is necessary so that the 280G Payments equal the Safe Harbor Amount and none of the 280G Payments constitute a deferral of compensation within the meaning of and subject to Section 409A (“Nonqualified Deferred Compensation”), then the reduction shall occur in the manner the Executive elects in writing prior to the date of payment. If any 280G Payments constitute Nonqualified Deferred Compensation or if the Executive fails to elect an order, then the 280G Payments to be reduced will be determined in a manner which has the least economic cost to the Executive and, as a resultto the extent the economic cost is equivalent, no Waived 280G Benefits will be reduced in the inverse order of when payment would have been made to you, until the reduction is achieved.
(b) All calculations and determinations under this Section 5.9 shall be made by an independent accounting firm or provided.independent tax counsel appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding on the Company and the Executive for all purposes. For purposes of making the calculations and determinations required by this Section 5.9, the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Company and the Executive shall furnish the Tax Counsel with such information and documents as the Tax Counsel may reasonably request in order to make its determinations under this
Appears in 1 contract
Samples: Employment Agreement (Bankwell Financial Group, Inc.)
Section 280G. To the extent that any “disqualified individual” with respect to the Company or (a) If any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably received or to be expected received by the Executive (including, without limitation, any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payments”) constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder), and (ii) no later than two (2) Business Days prior will be subject to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of excise tax imposed under Section 280G(b)(5)(B)(ii) 4999 of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G ApprovalExcise Tax”) or ), the Executive shall receive the greatest of the following, whichever gives the Executive the highest net after-tax amount (iiafter taking into account federal, state, local and social security taxes):
(1) the 280G Approval was not obtainedPayments or
(2) one dollar less than the amount of the Payments that would subject the Executive to the Excise Tax (the “Safe Harbor Amount”). If a reduction in the 280G Payments is necessary so that the 280G Payments equal the Safe Harbor Amount and none of the 280G Payments constitute a deferral of compensation within the meaning of and subject to Section 409A (“Nonqualified Deferred Compensation”), then the reduction shall occur in the manner the Executive elects in writing prior to the date of payment. If any 280G Payments constitute Nonqualified Deferred Compensation or if the Executive fails to elect an order, then the 280G Payments to be reduced will be determined in a manner which has the least economic cost to the Executive and, as a resultto the extent the economic cost is equivalent, no Waived 280G Benefits will be reduced in the inverse order of when payment would have been made to you, until the reduction is achieved.
(b) All calculations and determinations under this Section 5.9 shall be made by an independent accounting firm or provided.independent tax counsel appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding on the Company and the Executive for all purposes. For purposes of making the calculations and determinations required by this Section 5.9, the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Company and the Executive shall furnish the Tax Counsel with such information and documents as the Tax Counsel may reasonably request in order to make its determinations under this
Appears in 1 contract
Samples: Employment Agreement (Bankwell Financial Group, Inc.)
Section 280G. To (a) Notwithstanding anything contained in this Agreement to the contrary, (i) to the extent that any “disqualified individual” with respect payment or distribution of any type to or for the Executive by the Company, any affiliate of the Company, any Person who acquires ownership or effective control of the Company or any ownership of its Affiliates a substantial portion of the Company’s assets (within the meaning of Section 280G(c) 280G of the Code and the regulations thereunder) would receive Code, or any payments affiliate of such Person, whether paid or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior payable or distributed or distributable pursuant to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver terms of such disqualified individual’s rights to some this Agreement or all of such payments or benefits otherwise (the “Waived 280G BenefitsPayments”) so that any remaining payments and/or benefits shall not be deemed to be constitute “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderCode), and if (ii) no later than two (2) Business Days prior to such aggregate would, if reduced by all federal, state and local taxes applicable thereto, including the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of excise tax imposed under Section 280G(b)(5)(B)(ii) 4999 of the Code and any regulations promulgated thereunder) (the right of any such “disqualified individual” to receive Excise Tax”), be less than the Waived amount the Executive would receive, after all taxes, if the Executive received aggregate Payments equal (as valued under Section 280G Benefitsof the Code) to only three times the Executive’s “base amount” (within the meaning of Section 280G of the Code), less $1.00, then (iii) such Payments shall be reduced (but not below zero) if and to the extent necessary so that no Payments to be made or benefit to be provided to the Executive shall be subject to the Excise Tax. Prior to soliciting such waivers and approvalIf the Payments are so reduced, the Company shall provide drafts reduce or eliminate the Payments (A) by first reducing or eliminating the portion of the Payments which are not payable in cash (other than that portion of the Payments subject to clause (C) hereof), (B) then by reducing or eliminating cash payments (other than that portion of the Payments subject to clause (C) hereof) and (C) then by reducing or eliminating the portion of the Payments (whether payable in cash or not payable in cash) to which Treasury Regulation Section 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time.
(b) It is possible that after the determinations and selections made pursuant to this Section 8.2 the Executive will receive 280G benefits that are, in the aggregate, either more or less than the amount provided under this Section 8.2 (hereafter referred to as an “Excess Payment” or “Underpayment,” respectively). If it is established, pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved, that an Excess Payment has been made, then the Executive shall promptly pay an amount equal to the Excess Payment to the Company, together with interest on such amount at the applicable federal rate (as defined in and under Section 1274(d) of the Code) from the date of the Executive’s receipt of such waivers and disclosure and approval materials to Parent for its review and approval Excess Payment until the date of such payment. In the event that it is determined (which approval will not be unreasonably withheldi) by a court or (ii) by the auditor upon request by a Party, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Datethat an Underpayment has occurred, the Company shall deliver promptly pay an amount equal to Parent evidence reasonably acceptable the Underpayment to Parent that a vote of holders of the equity interests of Executive, together with interest on such amount at the Company was solicited in accordance with applicable federal rate from the foregoing date such amount would have been paid to the Executive had the provisions of this Section 7.11 and that either (i) 8.2 not been applied until the requisite number date of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedsuch payment.
Appears in 1 contract
Section 280G. To the extent that any “disqualified individual” with respect necessary to avoid the Company or any of its Affiliates (within the meaning application of Section 280G(c) 280G of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code applicable final Treasury Regulations and the regulations rulings thereunder, then, the Company will (i) no later than four five (45) Business Days prior to the Closing Date, the Company shall (a) use commercially reasonable best efforts to obtain waivers from each such “disqualified individual” person who has a waiver of such disqualified individual’s rights right to some or all of such any payments or benefits (as a result of or in connection with the Transactions that would reasonably be expected to constitute “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations applicable Treasury Regulations thereunder and as to which such person waives his or her rights to some or all of such payments and/or benefits (such payments or benefits actually waived, the “Waived 280G Benefits”) applicable to such person so that all remaining payments or benefits applicable to such person shall not be deemed to be “excess parachute payments” within the meaning of Section 280G of the Code and the applicable Treasury Regulations thereunder), and (iib) no later than two (2) Business Days prior to following the Closing Date, with respect to each individual who agrees to execution of the waiver waivers described in clause (ia), submit solicit the approval of the shareholders of the Company of any Waived 280G Benefits pursuant to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy meet the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any regulations promulgated the applicable Treasury Regulations thereunder) , which related documents shall be in a form reasonably satisfactory to the right of any such “disqualified individual” to receive SPAC (provided that the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts SPAC’s approval of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will form shall not be unreasonably withheld, conditioned withheld or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval). If To the extent any of the Waived 280G Benefits fail to be were not approved by the shareholders of the Company as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, On or prior to the Closing Date, the Company shall deliver to Parent the SPAC evidence reasonably acceptable to Parent that a vote of holders of the equity interests shareholders of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 7.17 and that either (i) the requisite number of votes of holders of the equity interests of the Company was were obtained with respect to the Waived 280G Benefits (the “280G Approval”) ), or (ii) that the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided. The Company shall provide the SPAC with a copy of such waiver and disclosure statement within a reasonable time prior to, and in no event later than two (2) Business Days prior to, delivery to the “disqualified individuals” and the shareholders of the Company of such waiver and disclosure statement, respectively, and the Company shall reflect in such waiver and disclosure statement any changes reasonably requested by the SPAC (provided that the SPAC’s approval of such changes shall not be unreasonably withheld or delayed). No later than seven (7) Business Days prior to the Closing Date, the Company shall provide the SPAC with a summary of the calculations and related documentation reasonably required to determine whether the vote described in this Section 7.17 is necessary in order to avoid the imposition of Taxes under Section 4999 of the Code.
Appears in 1 contract
Samples: Business Combination Agreement (Anzu Special Acquisition Corp I)
Section 280G. To Notwithstanding any other provision of this Agreement, in the event that any payment or benefit received or to be received by you (including any payment or benefit received in connection with a termination of your employment, whether pursuant to the terms of the Employment Agreement, as amended by this Amendment, or any other plan, arrangement or agreement) (all such payments and benefits being hereinafter referred to as the “Total Payments”) would, as a result of the occurrence of a Change in Control of the Company, be subject (in whole or part) to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then Cash Severance shall be reduced to the extent necessary so that any “disqualified individual” with respect no portion of the Total Payments is subject to the Company Excise Tax. For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (a) no portion of the Total Payments shall be taken into account which, in the written opinion of an independent, nationally recognized accounting or any of its Affiliates consulting firm (the “Independent Advisors”) selected by the Company, does not constitute a “parachute payment” within the meaning of Section 280G(c280G(b)(2) of the Code and (including by reason of Section 280G(b)(4)(A) of the regulations thereunderCode) would receive any payments or benefits that would reasonably and, in calculating the Excise Tax, no portion of such Total Payments shall be expected to constitute “parachute payments” (taken into account which, in the opinion of the Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(2)(A280G(b)(4)(B) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver in excess of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute paymentsbase amount” (within the meaning of as defined in Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii280G(b)(3) of the Code Code) allocable to such reasonable compensation; and any regulations promulgated thereunder(b) the right value of any such “disqualified individual” to receive non-cash benefit or any deferred payment or benefit included in the Waived 280G Benefits. Prior to soliciting such waivers and approval, Total Payments shall be determined by the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited Independent Advisors in accordance with the foregoing provisions principles of this Section 7.11 Sections 280G(d)(3) and that either (i4) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedCode.
Appears in 1 contract
Section 280G. To 8.1 Notwithstanding any other provision of this Agreement, except as set forth in Section 8.2, in the event that the Company undergoes a “Change in Ownership or Control” (as defined below), the Company shall not be obligated to provide to the Executive a portion of any “Contingent Compensation Payments” (as defined below) that the Executive would otherwise be entitled to receive to the extent that necessary to eliminate any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “excess parachute payments” (within as defined in Code Section 280G(b)(l)) for the meaning Executive. For purposes of this Section 280G(b)(2)(A8, the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Payments” and the aggregate amount (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior Contingent Compensation Payments so eliminated shall be referred to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (as the “Waived 280G BenefitsEliminated Amount.”) so that any remaining payments and/or benefits
8.2 Notwithstanding the provisions of 8.1, no such reduction in Contingent Compensation Payments shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either if (i) the requisite number of votes of holders Eliminated Amount (computed without regard to this sentence) exceeds (ii) 110% of the equity interests aggregate present value (determined in accordance with Treasury Regulation Section 1.280G-l, Q/A-31 and Q/A-32 or any successor provisions) of the Company was obtained amount of any additional taxes that would be incurred by the Executive if the Eliminated Payments (determined without regard to this sentence) were paid to him or her (including, state and federal income taxes on the Eliminated Payments, the excise tax imposed by Section 4999 of the Code payable with respect to all of the Waived 280G Benefits Contingent Compensation Payments in excess of the Executive’s “base amount” (as defined in Section 280G(b)(3) of the “280G Approval”) or (ii) the 280G Approval was not obtainedCode), and, and any withholding taxes). The override of such reduction in Contingent Compensation Payments pursuant to this Section 8.2 shall be referred to as a result“Section 8.2 Override.” For purpose of this paragraph, no Waived 280G Benefits if any federal or state income taxes would be attributable to the receipt of any Eliminated Payment, the amount of such taxes shall be made or providedcomputed by multiplying the amount of the Eliminated Payment by the maximum combined federal and state income tax rate provided by Jaw.
8.3 For purposes of this Section 8 the following terms shall have the following respective meanings:
Appears in 1 contract
Samples: Employment Agreement (Achillion Pharmaceuticals Inc)
Section 280G. To the extent that applicable, the Company shall (a) solicit from any Person who (i) is a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of as defined in Section 280G(c) 280G of the Code Code) and the regulations thereunder(ii) would receive has a right to any payments or and/or benefits in connection with the transactions contemplated by this Agreement that would reasonably be expected deemed to constitute “parachute payments” (within the meaning of pursuant to Section 280G(b)(2)(A) 280G of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individualPerson’s rights right to some or all of any such payments or benefits (the “Waived 280G Benefits”) and/or benefits, so that any all remaining payments and/or benefits applicable to such Person shall not be deemed to be “parachute payments” pursuant to Section 280G of the Code (within the meaning “Waived 280G Benefits”), and (b) for all such obtained waivers, submit for approval to the requisite shareholders the Waived 280G Benefits, to the extent and in the manner required under Sections 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code. No later than five (5) Business Days before the Closing Date, the Company shall provide to Buyer or its counsel drafts of the consent, waiver, disclosure statement and calculations necessary to effectuate the approval process for review by Buyer or its counsel. Prior to the Closing Date, the Company shall deliver to Buyer evidence that (x) a vote of the requisite shareholders was received in conformance with Section 280G of the Code and the regulations thereunder), and or (iiy) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and requisite shareholder approval materials to Parent for its review and approval (which approval will has not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was been obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtainedBenefits, and, as a resultconsequence, no the Waived 280G Benefits have not been and shall not be made paid or provided. Notwithstanding the foregoing, to the extent that any Contract, agreement or plan is entered into or negotiated by Buyer or any of its Affiliates and a disqualified individual in connection with the transactions contemplated by this Agreement before the Closing Date (the “Buyer Arrangements”), Buyer shall provide a copy of such Contract, agreement or plan to the Company at least ten (10) Business Days before the Closing Date and shall cooperate with the Company in good faith in order to calculate or determine the value (for the purposes of Section 280G of the Code) of any payments or benefits provided, granted or contemplated therein, which may be paid, provided or granted in connection with the transactions contemplated by this Agreement that could constitute a “parachute payment” under Section 280G of the Code; provided that, in any event, the Company’s failure to include the Buyer Arrangements in the stockholder voting materials described herein as a result of Buyer not fulfilling its obligations under this Section 6.15 will not result in a breach of the covenants set forth in this Section 6.15.
Appears in 1 contract
Section 280G. To In the extent event it shall be determined that any “disqualified individual” with respect to payment or distribution by the Company or any of its Affiliates affiliates to or for the benefit of Executive (within whether paid or payable or distributed or distributable pursuant to the meaning terms of this Agreement or otherwise) (the “Total Payments”), is or will be subject to the excise tax (the “Excise Tax”) imposed by Section 280G(c4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then the Total Payments shall be reduced to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the net after-tax benefit to Executive after reducing Executive’s Total Payments to the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax) benefit to Executive without such reduction. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the cash payments made pursuant to Section 5(a)(ii) of this Agreement, then to the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected payment made pursuant to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A5(a)(iii) of this Agreement, then to any payment made pursuant to Section 5(a)(iv) of this Agreement, then to any payment made pursuant to Section 5(a)(v) of this Agreement, then to any payment made pursuant to Section 5(a)(vi) of this Agreement, and then to any other payment that triggers such Excise Tax in the Code and the regulations thereunder, then, the Company will following order: (i) no later than four reduction of cash payments; (4ii) Business Days prior cancellation of accelerated vesting of performance-based equity awards (based on the reverse order of the date of grant); (iii) cancellation of accelerated vesting of other equity awards (based on the reverse order of the date of grant); and (iv) reduction of any other payments due to Executive (with benefits or payments in any group having different payment terms being reduced on a pro-rata basis). All mathematical determinations, and all determinations as to whether any of the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be Total Payments are “parachute payments” (within the meaning of Section 280G of the Code Code), that are required to be made under this paragraph, including determinations as to whether the Total Payments to Executive shall be reduced to the Safe Harbor Cap and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail assumptions to be approved as contemplated aboveutilized in arriving at such determinations, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedat the Company’s expense by a nationally recognized accounting firm mutually acceptable to the Company and Executive.
Appears in 1 contract
Samples: Employment Agreement (Global Power Equipment Group Inc.)
Section 280G. To (a) If any payment(s) or benefit(s) that the extent that Executive would receive pursuant to this Agreement and/or pursuant to any “disqualified individual” with respect to the Company other agreement, plan, policy or any of its Affiliates arrangement would (i) constitute a "parachute payment" within the meaning of Code Section 280G(c2800 and the applicable regulations, and (ii) but for this Section 10.15 or any reduction provided by reason of Section Code 2800 in any such other agreement, plan, policy or arrangement, would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Executive shall be entitled to receive either (A) the full amount of the parachute payments, or (B) the maximum amount that may be provided to the Executive without resulting in any portion of such parachute payments being subject to the Excise Tax, whichever of clauses (A) and (B), after taking into account applicable federal, state, and local taxes and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “Excise Tax, results in the receipt by the Executive, on an after-tax basis, of the greatest portion of the parachute payments” (within . To the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all extent any of such payments or benefits are Section 409A deferred compensation, any reduction for purposes of clause (B) shall be made in the “Waived 280G Benefits”following order: (i) so cash severance payments that any remaining payments and/or benefits are exempt from Section 409A shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder), and reduced; (ii) no later than two (2) Business Days prior other cash payments and benefits that are exempt from Section 409A, but excluding any payments attributable to the Closing Date, an acceleration of vesting or payments with respect to each individual who agrees equity-based compensation that are exempt from Section 409A, shall be reduced; (iii) any other payments or benefits, but excluding any payments attributable to the waiver described in clause (i), submit to a vote an acceleration of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code vesting and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained payments with respect to equity-based compensation that are exempt from Section 409A, shall be reduced on a pro-rata basis or in such other manner that complies with Section 409A; and (iv) any payments attributable to an acceleration of vesting or payments with respect to equity-based compensation that are exempt from Section 409A shall be reduced, in each case beginning with payments that would otherwise be made last in time.
(b) Unless the Waived 280G Benefits (Company and the “280G Approval”Executive otherwise agree in writing, any determination required under Section 10.15(a) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided.in writing by the Company's
Appears in 1 contract
Section 280G. To 14.1 If there is a change of ownership or effective control or change in the extent that any “disqualified individual” with respect to ownership of a substantial portion of the assets of the Company or any of its Affiliates (within the meaning of Section 280G(c) 280G of the Code Code) (a “280G CIC”) and any payment or benefit (including payments and benefits pursuant to this Agreement) that Executive would receive from the regulations thereunderCompany or otherwise (“Transaction Payment”) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” constitute a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute paymentspayment” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior but for this sentence, be subject to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of excise tax imposed by Section 280G(b)(5)(B)(ii) 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to Executive, which of the following two alternative forms of payment would result in Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (A) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (B) payment of only a part of the Transaction Payment so that Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”, and any regulations promulgated thereunder) the right Executive shall be entitled to payment of any such “disqualified individual” whichever amount that shall result in a greater after-tax amount for Executive. For purposes of determining whether to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalmake a Full Payment or a Reduced Payment, the Company shall provide drafts cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such waivers state and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approvallocal taxes). If any a Reduced Payment is made, the reduction in payments and/or benefits will occur in the following order: (1) first, reduction of cash payments, in reverse order of scheduled payment date (or if necessary, to zero), (2) then, reduction of non-cash and non-equity benefits provided to Executive, on a pro rata basis (or if necessary, to zero) and (3) then, cancellation of the Waived 280G Benefits fail to be approved as contemplated aboveacceleration of vesting of equity award compensation in the reverse order of the date of grant of Executive’s equity awards.
14.2 Unless Executive and the Company otherwise agree in writing, such Waived 280G Benefits any determination required under this section shall not be made or provided. To in writing by the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes. For purposes of making such determination, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G Approval”) or (ii) and 4999 of the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedCode.
Appears in 1 contract
Samples: Employment Agreement (PlayAGS, Inc.)
Section 280G. To The Company shall, prior to the extent that any Closing Date, (a) solicit and use reasonable best efforts to obtain from each “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the any regulations promulgated thereunder) would who could receive or retain any payments payment or benefits that would reasonably be expected to could constitute a “parachute paymentspayment” (within the meaning of Section 280G(b)(2)(A) of the Code and the any regulations promulgated thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining no payments and/or benefits shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G 280G(b)(1) of the Code and the any regulations promulgated thereunder), ) and (iib) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a Company shareholder vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy satisfying the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalapproval materials, the Company shall provide drafts of such the calculations, waivers and disclosure and approval materials to Parent Acquiror for its review review, approval, and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days comment prior to soliciting such waivers and soliciting such approval, and the Company shall consider in good faith any comments provided by Acquiror. If any of the Waived 280G Benefits fail to be approved in accordance with the requirements of Section 280G(b)(5)(B) of the Code and any regulations promulgated thereunder as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing DateClosing, the Company shall deliver to Parent Acquiror evidence reasonably acceptable to Parent Acquiror that a vote of holders of the equity interests of the Company shareholders was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company shareholders was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made retained or provided.
Appears in 1 contract
Section 280G. To (a) Notwithstanding any other provision of this Agreement, in the extent event that any “disqualified individual” with respect payment or benefit received or to be received by Executive (whether pursuant to the Company terms of this Agreement or any of its Affiliates other plan, arrangement or agreement) (within all such payments and benefits being hereinafter referred to as the meaning of “Total Payments”) would be subject (in whole or part), to the excise tax imposed under Section 280G(c) 4999 of the Code and (the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunderExcise Tax”), then, after taking into account any reduction in the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning Total Payments provided by reason of Section 280G of the Code in any other plan, arrangement or ||| agreement, then such remaining Total Payments shall be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the regulations thereunderamount of Excise Tax to which Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b) For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders portion of the equity interests Total Payments shall be taken into account which, in the written opinion of an independent, nationally recognized accounting firm (the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy “Independent Advisors”) selected by the requirements Company, does not constitute a “parachute payment” within the meaning of Section 280G(b)(5)(B)(ii280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation; and any regulations promulgated thereunder(iii) the right value of any such “disqualified individual” to receive non-cash benefit or any deferred payment or benefit included in the Waived 280G Benefits. Prior to soliciting such waivers and approval, Total Payments shall be determined by the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited Independent Advisors in accordance with the foregoing provisions principles of this Section 7.11 Sections 280G(d)(3) and that either (i4) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedCode.
Appears in 1 contract
Samples: Employment Agreement (Kennedy-Wilson Holdings, Inc.)
Section 280G. To The payments, benefits and vesting, if any, to which you are entitled under Section 5 (and all other payments, benefits and vesting to which you may be entitled) shall be provided without regard to whether the extent that any “disqualified individual” with respect to the Company deductibility of such payments, benefits and vesting would be limited or any of its Affiliates (within the meaning of precluded by Section 280G(c) 280G of the Code (“Section 280G”) and the regulations thereunderwithout regard to whether such payments (or any other payment, benefits and vesting) would receive any payments or benefits that would reasonably be expected subject you to constitute the federal excise tax levied on certain “excess parachute payments” (within the meaning of under Section 280G(b)(2)(A) 4999 of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G BenefitsExcise Tax”). If any portion of the payments, benefits and vesting to or for your benefit (including, but not limited to, payments, benefits and vesting under this Agreement but determined without regard to this paragraph) so that any remaining payments and/or benefits shall not be deemed to be constitutes an “excess parachute paymentspayment” (within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the Code and the regulations thereunder“Excess Parachute Payments”), and (ii) no later than two (2) Business Days prior the Company shall promptly pay to the Closing Daterelevant taxing authority as withholding taxes at such time or times when each payment of Excise Tax is due, an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to each individual who agrees such gross-up payment equals the Excise Tax with respect to the waiver described in clause (iExcess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section 5(e), submit shall be adjusted to a vote of holders of the equity interests of extent necessary (but only to the Company entitled extent necessary) to vote on such matters (along comply with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a) (l)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any regulations promulgated thereunder) gross-up for the right Section 409A penalties. The determination as to whether your payments, benefits and vesting include Excess Parachute Payments and, if so, the amount of such, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by such certified public accounting firm as the Board may designate prior to a Change of Control (the “disqualified individual” to receive accounting firm”). Notwithstanding the Waived 280G Benefits. Prior to soliciting such waivers and approvalforegoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall provide drafts of promptly augment the gross-up payment to address such waivers and disclosure and approval materials higher Excise Tax liability. Notwithstanding anything in this section to Parent for its review and approval (which approval will not be unreasonably withheldthe contrary, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any the maximum amount of the Waived 280G Benefits fail to be approved as contemplated abovegross-up payment, such Waived 280G Benefits including any gross-up for Section 409A penalties, shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedexceed $500,000.
Appears in 1 contract
Section 280G. To Not less than three (3) Business Days prior to the extent Closing Date, the Company shall submit to the Stockholders for approval (in a manner and with disclosure documentation reasonably satisfactory to Parent) by a vote of such Stockholders as is required pursuant to Section 280G(b)(5)(B) of the Code and the Treasury Regulations issued thereunder (the “280G Stockholder Vote”), any such payments or other benefits that any may, separately or in the aggregate, result in “parachute payments” within the meaning of Section 280G(b) of the Code (determined without regard to Section 280G(b)(4) of the Code) and the Treasury Regulations thereunder (the “280G Payments”), such that, if the 280G Stockholder Vote is received approving the 280G Payments, such 280G Payments shall not cause there to be “excess parachute payments” within the meaning of 280G(b)(1) of the Code and the Treasury Regulations thereunder. The 280G Stockholder Vote shall establish the right of each “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and (a “Disqualified Individual”) to receive or retain the regulations thereunder) would receive any payments or benefits that would reasonably 280G Payments. Prior to the 280G Stockholder Vote, the Company shall obtain, from each Disqualified Individual who might be expected to constitute “parachute receive a 280G Payment, a written, executed waiver (in a form reasonably satisfactory to Parent), pursuant to which such Disqualified Individual agrees to waive any and all rights to any payments” (within , to the meaning of extent such payments would cause the 280G Payments not to be deductible pursuant to Section 280G(b)(2)(A) 280G of the Code and (the regulations thereunder, then“280G Waivers”). Such 280G Waivers shall cease to have any force or effect with respect to any item covered thereby to the extent the 280G Stockholder Vote for such item is obtained. In addition, the Company will (i) no later than four (4) Business Days prior shall provide adequate disclosure to the Closing Date, use reasonable best efforts Stockholders (including to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of extent required by Section 280G of the Code and the regulations Treasury Regulations thereunder)) of all material facts concerning all payments to any such Disqualified Individual that, and (ii) no later than two (2) Business Days prior to but for the Closing Date280G Stockholder Vote, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders could be deemed “parachute payments” under Section 280G of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Code in a manner that satisfies Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated the Treasury Regulations thereunder) . Parent and its counsel shall be provided with drafts of the right of any such “disqualified individual” to receive the Waived disclosure statement, 280G Benefits. Prior Waivers, and the consent to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent be signed by Stockholders referenced in this Section 5.13 for its review and approval (which approval will not before being finalized. Parent and its counsel shall also be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers provided copies of all documents executed by the Stockholders and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited Disqualified Individuals in accordance connection with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedStockholder Vote.
Appears in 1 contract
Samples: Merger Agreement (Ideanomics, Inc.)
Section 280G. To the extent that any “disqualified individual” with respect Notwithstanding anything in this Agreement to the Company contrary, if any payment or any of its Affiliates distribution Executive would receive pursuant to this Agreement or otherwise (within the meaning of Section 280G(c) of the Code and the regulations thereunder“Payment”) would receive any payments or benefits that would reasonably be expected to (a) constitute a “parachute paymentspayment” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder)Code, and (iib) no later than two (2) Business Days prior but for this sentence, be subject to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of excise tax imposed by Section 280G(b)(5)(B)(ii) 4999 of the Code and any regulations promulgated thereunder(the “Excise Tax”), then such Payment shall either be (i) the right of any delivered in full, or (ii) delivered as to such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts lesser extent which would result in no portion of such waivers and disclosure and approval materials Payment being subject to Parent for its review and approval (which approval will not be unreasonably withheldthe Excise Tax, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any whichever of the Waived 280G Benefits fail to foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the largest payment, notwithstanding that all or some portion of the Payment may be approved as contemplated above, such Waived 280G Benefits shall not be made or providedtaxable under Section 4999 of the Code. To the extent applicableThe Company shall, prior to the Closing Dateeffective date of the change in control, appoint an accounting firm or firm specializing in Section 280G of the Code to perform the foregoing calculations. The Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained bear all expenses with respect to the Waived 280G Benefits (determinations by such accounting firm required to be made hereunder. Any good faith, reasonable determinations of the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits accounting firm made hereunder shall be made final, binding and conclusive upon the Company (and successors) and Executive. Any reduction in payments and/or benefits pursuant to this Section 22 will occur in the following order: (1) reduction of cash payments the full amount of which are treated as parachute payments; (2) reduction in payments due in respect of equity awards the full amount of which are treated as parachute payments; (3) reduction of cash payments less than the full amount of which are treated as parachute payments, with the highest values reduced first; (4) reduction in payments due in respect of equity awards less than the full amount of which are treated as parachute payments, with the highest values reduced first; and (5) reduction of other benefits payable to Executive, with the highest values reduced first. Nothing in this Section 22 shall require the Company or providedany of its affiliates to be responsible for, or have any liability or obligation with respect to, Executive’s excise tax liabilities under Section 4999 of the Code.
Appears in 1 contract
Samples: Executive Agreement (UDR, Inc.)
Section 280G. To The Seller Representative shall, and shall cause the extent that any Company to, use its commercially reasonable efforts as soon as practicable after the date hereof (but in no event later than the second Business Day immediately prior to the Closing Date) to obtain from each Person who is a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning for purposes of Section 280G(c) 280G of the Code and the regulations thereunder) would receive to whom any payments payment or benefits benefit is required or proposed to be made pursuant to an Employee Plan then in effect (or pursuant to a compensation plan or arrangement of any WU Company that would reasonably will be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) in effect as of the Code Closing Date, but only if Buyer provides a copy of such plan or arrangement to the Company, and any related information reasonably requested by the regulations thereunderCompany, then, the Company will at least seven (i) no later than four (47) Business Days prior to the Closing Date, use reasonable best efforts ) that could constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code and the regulations promulgated thereunder) a written agreement waiving such Person’s right to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to receive some or all of such payments or and/or benefits (with respect to such Persons who elect to waive, collectively, the “Waived 280G Benefits”) so that any all remaining payments and/or benefits to be paid or provided to such Person shall not be deemed to be “a parachute payments” payment that would not be deductible under Section 280G of the Code, and to accept in substitution the right to receive the Waived Benefits only if approved by the stockholders of the Company in a manner that complies with Section 280G(b)(5)(B) of the Code. Each such waiver will identify the specific Waived Benefit and will provide that if such stockholder approval is not obtained, such Waived Benefit will not be made and/or provided and such Persons will have no right or entitlement with respect thereto. As soon as practicable thereafter, but in any event prior to the Closing Date, the Seller Representative shall cause the Company to seek stockholder approval with respect to those Persons who have waived in a manner that complies with Section 280G(b)(5)(B) of the Code of all such Waived Benefits. The analysis under Section 280G of the Code and the form of each such waiver, the stockholder consent and the disclosure will be provided to Buyer for Buyer’s advance review, and the Company will consider in good faith all changes thereto reasonably proposed by Buyer. The Company shall not pay or provide any of the Waived Benefits if such Waived Benefits are not approved by the Company’s stockholders as contemplated above. Prior to the Closing Date, the Company shall deliver to Buyer evidence satisfactory to Buyer that (within a) a vote of the meaning of Company’s stockholders was received in conformance with Section 280G of the Code and the regulations thereunder), and or (iib) no later than two (2) Business Days prior to the Closing Date, such requisite Company Stockholder approval has not been obtained with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, and, as a consequence, the Company shall provide drafts of such waivers Waived Benefits have not been and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided.
Appears in 1 contract
Section 280G. To the extent that any Each Subject Company will use commercially reasonable efforts to secure from each Person who is a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of as defined in Section 280G(c) of the Code and (each, a “Disqualified Individual”) to whom any payment or benefit is required or proposed to be made in connection with the regulations thereunder) would receive any payments or benefits transactions contemplated by this Agreement that would reasonably be expected to could constitute “parachute payments” (within the meaning of under Section 280G(b)(2)(A280G(b)(2) of the Code and the regulations thereunder, then, the Company will (i“Section 280G Payments”) no later than four (4) Business Days prior a written agreement waiving such Disqualified Individual’s right to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to receive some or all of such payments payment or benefits benefit (the “Waived 280G Benefits”) ), to the extent necessary so that any all remaining payments and/or and benefits shall applicable to such Disqualified Individual will not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior accepting in substitution for the Waived Benefits the right to receive the Closing Date, Waived Benefits only if approved by the equityholders of such Subject Company in a manner that complies with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code (the “280G Stockholder Approval”). Prior to the Closing, each Subject Company will submit the Waived Benefits of each Disqualified Individual who has executed a waiver in accordance with this Section 11.8 for approval of such Subject Company’s equityholders and any regulations promulgated thereunder) the such Disqualified Individual’s right of any such “disqualified individual” to receive the Waived Benefits will be conditioned upon receipt of the requisite approval by such equityholders in a manner that complies with Section 280G(b)(5)(B) of the Code; provided, in no event will this Section 11.8 be construed to require such Subject Company (or any of its Affiliates) to compel any Disqualified Individual to waive any existing rights under any contract or agreement that such Disqualified Individual has with Sellers, such Subject Company or any other Person, and in no event will such Subject Company (or any of its Affiliates) be deemed in breach of this Section 11.8 if any such Disqualified Individual refuses to waive any such rights or if such equityholders fail to approve any Waived Benefits. Within a reasonable time prior to seeking any waiver of the Waived Benefits and the 280G BenefitsStockholder Approval, the Subject Company will provide Purchaser’s counsel with a copy of the waiver agreement, the disclosure statement, equityholder consent and calculations prepared in connection with the actions contemplated by this Section 11.8 and such Subject Company will consider in good faith any changes reasonably requested by Purchaser or its counsel. Prior to soliciting such waivers and approvalthe Closing, the Subject Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and Purchaser notification that either (i) the requisite number of votes of holders of the equity interests of the Company 280G Stockholder Approval was obtained with respect to the Waived Section 280G Benefits (the “280G Approval”) Payments or (ii) the 280G Stockholder Approval was not obtained, andobtained with respect to the Section 280G Payments and that, as a resultconsequence, no Waived Benefits will be paid. Notwithstanding the foregoing, to the extent that any contract, agreement, or plan is entered into by Purchaser or any of its Affiliates and a Disqualified Individual in connection with the transactions contemplated by this Agreement before the Closing Date (the “Purchaser Arrangements”), Purchaser shall provide a copy of such contract, agreement or plan to the Subject Company before the Closing Date and shall cooperate with such Subject Company in good faith in order to calculate or determine the value (for the purposes of Section 280G Benefits shall of the Code) of any payments or benefits granted or contemplated therein, that may be made paid or providedgranted in connection with the transactions contemplated by this Agreement that could constitute a “parachute payment” under Section 280G of the Code; provided that, in any event, such Subject Company’s failure to include the Purchaser Arrangements in the 280G Stockholder Approval materials described herein, for any reason, will not result in a breach of the covenants set forth in this Section 11.8.
Appears in 1 contract
Samples: Securities Purchase Agreement (Devon Energy Corp/De)
Section 280G. To Notwithstanding anything in this Agreement or otherwise to the extent contrary, in the event that any “disqualified individual” with respect to payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Issuer, the Company or any member of the Company Group, or any entity that effectuates a change of control (or any of its Affiliates affiliates) to or for the benefit of the Employee (whether pursuant to the terms of this Agreement or any other plan, equity-based award, arrangement, agreement or otherwise) (all such payments, awards, benefits and/or distributions being hereinafter referred to as the “Total Payments”) would be subject to the excise tax under Section 4999 of the Code (or any successor provision) (the “Excise Tax”), then:
a. If no “stock” of the Company Group is then “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(c280G(b)(5)(A)(ii)(I) of the Code and Code, prior to the regulations thereunderclosing of the applicable transaction, the Company (or the applicable corporation undergoing a change in control) would receive shall make good faith efforts to obtain shareholder approval of the portion of the Total Payments, such that upon shareholder approval, no portion of the Total Payments shall be subject to the Excise Tax. The Employee shall fully cooperate to ensure that such shareholder approval of such portion of the Total Payments is valid (including by executing all required waivers). Failure to obtain such shareholder approval following good faith efforts of the Company (or the applicable corporation undergoing a change in control) shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax. In addition, the Employee can voluntarily decide not to execute the waiver, in which case the failure of the Company (or benefits the applicable corporation undergoing a change in control) to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax.
b. In the event that would reasonably be expected to constitute (i) the shareholder approval described in Section 19(a) is not obtained or (ii) the “parachute paymentsstock” (of the Company Group is “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(2)(A280G(b)(5)(A)(ii)(I) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Dateextent necessary to make no portion of the Total Payments subject to the Excise Tax, use reasonable best efforts to obtain from each such “disqualified individual” a waiver the portion of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so Total Payments that any remaining payments and/or benefits shall do not be deemed to be “parachute payments” (constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with any such reduction being made as follows: cash payments being reduced before equity-based compensation or other non-cash compensation or benefits, in each case, in reverse order beginning with payments or benefits that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code and Code, provided that, in the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote case of holders all of the equity interests of the Company entitled foregoing Total Payments, all amounts that are not subject to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefitscalculation under Treas. Prior to soliciting such waivers and approvalReg. §1.280G-1, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”Q&A-24(b) or (iic) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) as would result in no portion of the payments being considered “excess parachute payments” under Section 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedof the Code.
Appears in 1 contract
Samples: Employment Agreement (Duck Creek Technologies, Inc.)
Section 280G. To the extent that any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(ca) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no No later than four three (43) Business Days prior to the Closing DateClosing, use reasonable best efforts to obtain Panavision will (i) solicit from each such “disqualified individual” Person who has a waiver of such disqualified individual’s rights right to some or all of such any payments or benefits (as a result of or in connection with the “Waived 280G Benefits”) so Transactions that any remaining payments and/or benefits shall not would be deemed to be constitute “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderpromulgated thereunder (hereafter, “Section 280G”)) (which, for the avoidance of doubt, shall include payments or benefits pursuant to agreements or arrangements entered into between Acquiror or any of its Subsidiaries and such Person that create a right or entitlement by such Person to receive any “parachute payments” within the meaning of Section 280G; provided all information necessary to include any such payments or benefits is provided to Panavision by Acquiror or its Representatives no later than ten (10) Business Days prior to the Closing), a waiver of such Person’s rights to all of such payments or benefits (to the extent waived, the “Panavision Waived 280G Benefits”) applicable to such Person so that all remaining payments or benefits applicable to such Person shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G), and (ii) no later than two (2) Business Days prior solicit the approval of Panavision’s equityholders, to the Closing Date, with respect to each individual who agrees to the waiver described extent required and in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure manner intended to satisfy the requirements of Section 280G(b)(5)(B)(iicomply with Sections 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code and any the regulations promulgated thereunder) the right , of any such “disqualified individual” to receive the Panavision Waived 280G Benefits. Prior to soliciting such waivers and soliciting such approval, the Company Panavision shall provide drafts of such waivers and disclosure and such equityholder approval materials (including supporting calculations) to Parent Acquiror and its Representatives for its their review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four five (45) Business Days prior to soliciting such waivers and soliciting such approvalapproval and consider in good faith any comments that Acquiror and its Representatives may provide thereon. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing DateClosing, the Company Panavision shall deliver to Parent Acquiror reasonably satisfactory evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company Panavision’s equityholders was solicited in accordance with the foregoing provisions of this Section 7.11 8.9 and that either (i) the requisite number of equityholder votes of holders of the equity interests of the Company was obtained with respect to the Panavision Waived 280G Benefits (the “Panavision 280G Approval”) ), or (ii) that the Panavision 280G Approval was not obtained. If the Panavision 280G Approval is not obtained, and, as a result, no such Panavision Waived 280G Benefits shall not be made paid or provided. Notwithstanding the foregoing, to the extent that any contract, agreement, or plan is entered into by Acquiror, any of its Representatives, or the Surviving Corporation and a disqualified individual in connection with the Transactions prior to the Closing (the “Panavision Acquiror Arrangements”), Panavision’s failure to include any Panavision Acquiror Arrangements in the stockholder voting materials described herein, for any reason, will not result in a breach of the covenants set forth in this Section 8.9 unless Acquiror provides a copy of such contract, agreement or plan to Panavision at least ten (10) days prior to the Closing and sufficient information reasonably necessary to determine the value (for purposes of Section 280G of the Code) of any payments or benefits granted or contemplated therein, which may be paid or granted in connection with the Transactions that would be deemed to constitute a “parachute payment” under Section 280G of the Code.
(b) No later than three (3) Business Days prior to the Closing, SIM will (i) solicit from each Person who has a right to any payments or benefits as a result of or in connection with the Transactions that would be deemed to constitute “parachute payments” within the meaning of Section 280G (which, for the avoidance of doubt, shall include payments or benefits pursuant to agreements or arrangements entered into between Acquiror or its Subsidiaries and such Person that create a right or entitlement by such Person to receive any “parachute payments” within the meaning of Section 280G; provided, that all information necessary to include any such payments or benefits is provided to SIM by Acquiror or its Representatives no later than ten (10) Business Days prior to the Closing), a waiver of such Person’s rights to all of such payments or benefits (to the extent waived, the “SIM Waived 280G Benefits”) applicable to such Person so that all remaining payments or benefits applicable to such Person shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G), and (ii) solicit the approval of SIM’s equityholders, to the extent required and in a manner intended to comply with Sections 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code and the regulations promulgated thereunder, of any SIM Waived 280G Benefits. Prior to soliciting such waivers and soliciting such approval, SIM shall (A) provide drafts of such waivers and such equityholder approval materials to Acquiror and its Representatives for their review no later than five (5) Business Days prior to soliciting such waivers and soliciting such approval and consider in good faith any comments that Acquiror and its Representatives may provide thereon, and (B) provide supporting calculations with respect to all Persons who are reasonably expected to be “disqualified individuals” for purposes of Section 280G of the Code to Acquiror, Panavision and the Panavision Holder Representative promptly (and in any event within thirty (30) days) after the date hereof. Prior to the Closing, SIM shall deliver to Acquiror reasonably satisfactory evidence that a vote of SIM’s equityholders was solicited in accordance with the foregoing provisions of this Section 8.9 and that either (1) the requisite number of equityholder votes was obtained with respect to the SIM Waived 280G Benefits (the “SIM 280G Approval”), or (2) that the SIM 280G Approval was not obtained. In the event that SIM is unable to obtain a signed waiver from any affected Person, and the SIM 280G Approval is not obtained, all related SIM 280G Losses shall be treated as SIM Transaction Expenses. Notwithstanding the foregoing, to the extent that any contract, agreement, or plan is entered into by Acquiror or any of its Representatives and a disqualified individual in connection with the Transactions prior to the Closing (the “SIM Acquiror Arrangements”), SIM’s failure to include any SIM Acquiror Arrangements in the stockholder voting materials described herein, for any reason, will not result in a breach of the covenants set forth in this Section 8.9 unless Acquiror provides a copy of such contract, agreement or plan to SIM at least ten (10) days prior to the Closing and sufficient information reasonably necessary to determine the value (for purposes of Section 280G of the Code) of any payments or benefits granted or contemplated therein, which may be paid or granted in connection with the Transactions that would be deemed to constitute a “parachute payment” under Section 280G of the Code.
Appears in 1 contract
Samples: Business Combination Agreement (Saban Capital Acquisition Corp.)
Section 280G. To The Company shall use commercially reasonable efforts to solicit and obtain prior to the extent initiation of the requisite shareholder approval procedure contemplated in this Section 5.14(e), a waiver of the right to receive payments that any could constitute “disqualified individualparachute payments” under Section 280G of the Code and regulations promulgated thereunder (a “Parachute Payment Waiver”), in a form reasonably acceptable to Buyer, from each Person whom the Company and/or Buyer reasonably believes is, with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunderCompany Subsidiary, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such a “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations promulgated thereunder), and (ii) no later than two (2) Business Days as determined immediately prior to the initiation of the requisite shareholder approval procedure contemplated in this Section 5.14(e), and whom the Company believes might otherwise receive, have received, or have the right or entitlement to receive any parachute payment under Section 280G of the Code, and the Company shall have delivered each such Parachute Payment Waiver to Buyer on or before the Closing Date. The Company shall use commercially reasonable efforts to obtain the approval by such number of shareholders as is required by the terms of Section 280G(b)(5)(B) of the Code so as to render the parachute payment provisions of Section 280G of the Code inapplicable to any and all payments and/or benefits provided pursuant to contracts or arrangements that, in the absence of the executed Parachute Payment Waivers by the affected Persons under this Section, might otherwise result, separately or in the aggregate, in the payment of any amount and/or the provision of any benefit that would not be deductible by reason of Section 280G of the Code, with respect such stockholder approval to each individual who agrees to the waiver described be obtained in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the manner which satisfies all applicable requirements of such Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any regulations promulgated the Treasury Regulations thereunder, including Q-7 of Section 1.280G-I of such Treasury Regulations. No less than five (5) business days prior to the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalClosing, the Company shall provide drafts of such waivers forward to Buyer, and disclosure and approval materials allow Buyer to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicablecomment upon, prior to submission to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders shareholders of the equity interests Company, copies of the Company was solicited all material documents prepared for purposes of complying with this provision and shall consider any such comments in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedgood faith.
Appears in 1 contract
Section 280G. To (a) Notwithstanding anything contained in this Agreement to the contrary, (i) to the extent that any “disqualified individual” with respect payment or distribution of any type to or for the Executive by the Company, any Affiliate of the Company, any Person who acquires ownership or effective control of the Company or any ownership of its Affiliates a substantial portion of the Company’s assets (within the meaning of Section 280G(c) 280G of the Code Code) and all regulations, guidance, and other interpretative authority issued thereunder (collectively, “Section 280G”)and the regulations thereunder), or any Affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A280G), and if (ii) such aggregate would, if reduced by all federal, state and local taxes applicable thereto, including the excise tax imposed under Section 4999 of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived Excise Tax”), be less than the amount the Executive would receive, after all taxes, if the Executive received aggregate Payments equal (as valued under Section 280G Benefits”G) so that any remaining payments and/or benefits shall not be deemed to be only three times the Executive’s “parachute paymentsbase amount” (within the meaning of Section 280G of the Code and the regulations thereunderG), less $1.00, then (iii) such Payments shall be reduced (but not below zero) if and to the extent necessary so that no Payments to be made or benefit to be provided to the Executive shall be subject to the Excise Tax. All determinations required to be made under this Section 6.2 shall be made by a nationally recognized accounting firm that is (i) not serving as accountant or auditor for the individual, entity or group effecting the change in control and (ii) no later than two (2) Business Days prior to selected by the Closing Date, Company with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders consent of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company Executive which consent shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayeddelayed (the “Accounting Firm”), which shall provide detailed supporting calculations (which detailed supporting calculations shall include specific information about each Payment (including the amount of each Payment) no later than four and such other information as the Executive shall reasonably request or need to make the determination required of the Executive under this Section 6.2 both to the Company and the Executive within thirty (430) Business Days prior to soliciting business days after the Termination Date (or such waivers earlier time as is requested by the Company). Any such determination by the Accounting Firm shall be binding upon the Company and soliciting such approvalthe Executive. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing DatePayments are so reduced, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders reduce or eliminate the Payments (A) by first reducing or eliminating the portion of the equity interests Payments which are not payable in cash (other than that portion of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and Payments subject to clause (C) hereof), (B) then by reducing or eliminating cash payments (other than that either (i) the requisite number of votes of holders portion of the equity interests Payments subject to clause (C) hereof) and (C) then by reducing or eliminating the portion of the Company was obtained Payments (whether payable in cash or not payable in cash) to which Treasury Regulation § 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with respect payments or benefits which are to be paid the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedfarthest in time.
Appears in 1 contract
Section 280G. To (a) Notwithstanding anything in this Agreement or any other plan, arrangement or agreement to the extent contrary, in the event that any “disqualified individual” with respect payment or benefit received or to be received by Executive (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, the "Total Payments") would not be deductible (in whole or in part) by the Company or any of its subsidiaries or Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments making such payment or providing such benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” as a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning result of Section 280G of the Code Code, then, to the extent necessary to make such portion of the Total Payments deductible, the portion of the Total Payments that do not constitute deferred compensation within the meaning of Section 409A shall first be reduced (if necessary, to zero) in accordance with Section 409A, and all other Total Payments shall thereafter be reduced (if necessary, to zero) in accordance with Section 409A with cash payments being reduced before non-cash payments, and payments to be paid last being reduced first, but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the regulations thereunderamount of Excise Tax to which the Eligible Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b) For purposes of this limitation, (i) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no later than two portion of the Total Payments shall be taken into account which, in the opinion of tax counsel (2"Tax Counsel") Business Days reasonably acceptable to Executive and selected by the accounting firm which was, immediately prior to the Closing DateChange in Control, with respect to each individual who agrees to the waiver described in clause Company's independent auditor (ithe "Auditor"), submit to does not constitute a vote of holders of "parachute payment" within the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements meaning of Section 280G(b)(5)(B)(ii280G(b)(2) of the Code and any regulations promulgated thereunderCode, including by reason of Section 280G(b)(4)(A) of the Code; (iii) the right of any such “disqualified individual” severance payments payable to receive the Waived 280G Benefits. Prior Executive pursuant to soliciting such waivers and approval, the Company Section 5 hereof shall provide drafts of such waivers and disclosure and approval materials be reduced only to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior necessary so that the Total Payments (other than those referred to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either clauses (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) of this paragraph) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions by reason of Section 280G Approval was not obtainedof the Code, and, as a result, no Waived 280G Benefits in the opinion of Tax Counsel; and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be made or provideddetermined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
Appears in 1 contract
Samples: Employment Agreement (Brookdale Senior Living Inc.)
Section 280G. To the extent that If any Person who is a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the Department of Treasury regulations promulgated thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees the Company or the Company Subsidiary is entitled to the waiver described in clause (i), submit to a vote of holders receive any payment(s) or benefit(s) that would constitute parachute payments under Section 280G of the equity interests Code in connection with the transactions contemplated by this Agreement, then: (a) the Company shall obtain and deliver to Parent a Parachute Payment Waiver from each such “disqualified individual”; and (b) as soon as practicable following the delivery of the Parachute Payment Waivers (if any) to Parent, the Company entitled shall prepare and distribute to vote on its shareholders a disclosure statement describing all potential parachute payments and benefits that may be received by such matters (along disqualified individual(s) and shall submit such payments to its shareholders for approval, in each case, in accordance with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any the Department of Treasury regulations promulgated thereunder) , such that, if approved by the right requisite majority of any the shareholders, such payments and benefits shall not be deemed to be “disqualified individualparachute payments” to receive the Waived under Section 280G Benefitsof the Code (the foregoing actions, a “Section 280G Vote”). Prior to soliciting such waivers and approvalthe Closing, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived if a Section 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing DateVote is required, the Company shall deliver to Parent evidence reasonably acceptable satisfactory to Parent Parent, (i) that a vote of holders of the equity interests of the Company Section 280G Vote was solicited in accordance conformance with Section 280G of the foregoing provisions of this Section 7.11 Code, and that either (i) the requisite number of votes of holders of the equity interests of the Company shareholder approval was obtained with respect to any payments and/or benefits that were subject to the Waived 280G Benefits Company shareholder vote (the “Section 280G Approval”) or (ii) that the Section 280G Approval was not obtained, and, obtained and as a resultconsequence, no Waived 280G Benefits pursuant to the Parachute Payment Waiver, such “parachute payments” shall not be made or provided. The form of the Parachute Payment Waiver, the disclosure statement, any other materials to be submitted to the Company’s shareholders in connection with the Section 280G Approval and the calculations related to the foregoing (the “Section 280G Soliciting Materials”) shall be subject to advance review and approval by Parent, which approval shall not be unreasonably withheld, conditioned or delayed.
Appears in 1 contract
Section 280G. To Notwithstanding any other provision of this Agreement or any other agreement between Company and Employee, in the extent event that any “disqualified individual” payment or benefit received or to be received by Employee from Company (collectively with respect to all other such payments and benefits, the "Total Payments") would not be deductible, in whole or in part, by Company or any of its Affiliates (within the meaning as a result of Section 280G(c) 280G of the Internal Revenue Code and of 1986, as amended (the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder"Code"), then, to the extent necessary to make such payments deductible, the benefits provided hereunder shall be reduced (if necessary, to zero); provided, however, that Employee may elect which benefits to have reduced (including any benefits under any other agreement in effect between Company will and Employee). For purposes of this limitation, in the event Company asserts that the limitation would apply, (i) no later than four (4) Business Days prior portion of the Total Payments the receipt or enjoyment of which Employee shall have waived at such time and in such manner as not to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” constitute a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” ("payment" within the meaning of Section 280G of the Code and the regulations thereunder)shall be taken into account, and (ii) no later portion of the Total Payments shall be taken into account that, in the opinion of tax counsel selected by Company and reasonably accepted by Employee ("Tax Counsel"), does not constitute a "parachute payment" within the meaning of Section 280G of the Code, including by reason of Section 280G(b)(4)(A) of the Code, and (iii) the benefits payable under this Agreement shall be reduced only to the extent necessary so that the Total Payments (other than two those referred to in the preceding clauses (i) or (ii)) in their entirety are not, in the opinion of Tax Counsel, subject to disallowance as deductions by reason of Section 280G of the Code. If it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that, notwithstanding the good faith of Employee and Company in applying the terms of this Section 3(h), the Total Payments paid to or for Employee's benefit are in an amount that would result in any portion of such Total Payments being subject to excise tax under Section 280G of the Code, then, if, in the opinion of Tax Counsel, such repayment would result in (A) no portion of the remaining Total Payments being subject to such excise tax, and (B) a dollar-for-dollar reduction in Employee's taxable income and employment taxes, Employee shall be obligated to pay Company, upon demand, an amount equal to the sum of (1) the excess of the Total Payments paid to or for Employee's benefit over the Total Payments that could have been paid to or for Employee's benefit without any portion of such Total Payments being subject to such excise tax, and (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote interest on such matters (along with adequate disclosure intended to satisfy amount at the requirements of rate provided in Section 280G(b)(5)(B)(ii1274(b)(2)(B) of the Code from the date of Employee's receipt of such excess until the date of such payment. If, in the opinion of Tax Counsel, such repayment would not result in (x) no portion of the remaining Total Payments being subject to such excise tax, and (y) a dollar-for-dollar reduction in Employee's taxable income and employment taxes, Employee shall be obligated to pay Company, upon demand, an amount equal to the excise tax imposed under Section 4999 of the Code (if the Internal Revenue Service asserts such amount should have been withheld by the Company) and any regulations promulgated thereunder) penalties or fines imposed on Company by the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited Internal Revenue Service in accordance connection with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the failure by Company was obtained to make any withholdings or file any reports with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedsuch disallowed Total Payments.
Appears in 1 contract
Samples: Transition Services, Employment and Consulting Agreement (PLM International Inc)
Section 280G. To The Company shall request that each Person (each, a “Disqualified Individual”) to whom any payment or benefit is required or proposed to be made in connection with the extent transactions contemplated by this Agreement that any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to could constitute “parachute payments” (within the meaning of under Section 280G(b)(2)(A280G(b)(2) of the Code and (“Section 280G Payments”) execute a written agreement (the regulations thereunder, then, form of which shall be provided to the Company will (i) Parent no later than four three (43) Business Days prior to delivery to any Disqualified Individual for the Closing Date, use reasonable best efforts Parent’s approval) waiving such Disqualified Individual’s right to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to receive some or all of such payments payment or benefits benefit (the “Waived 280G Benefits”) ), to the extent necessary so that any all remaining payments and/or and benefits applicable to such Disqualified Individual shall not be deemed a parachute payment, and accepting in substitution for the Waived Benefits the right to receive the Waived Benefits only if approved by the stockholders of the Company in a manner that complies with Section 280G(b)(5)(B) of the Code. In connection with the foregoing, Parent shall provide the Company with all information reasonably necessary to allow the Company to determine whether any payments made or to be made or benefits granted or to be granted pursuant to any employment agreement or other agreement, arrangement or contract entered into or negotiated by Parent or its Affiliates (“Parent Payments”), together with all Section 280G Payments, would reasonably be considered to be “parachute payments” (within the meaning of Section 280G 280G(b)(2) of the Code at least two (2) days prior to the solicitation of stockholder approval of the Waived Benefits (including the Parent Payments) (and shall further provide any such updated information as is reasonably necessary prior to the regulations thereunderClosing Date), and (ii) no . No later than two (2) days prior to the Closing, the Company shall submit the Waived Benefits of each Disqualified Individual who has executed a waiver in accordance with this Section 5.07 for approval of the Company’s stockholders (the form of such approval and all related materials including a description of all Waived Benefits and Parent Payments shall be provided to the Parent at least two (2) Business Days prior to such solicitation for the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on Parent’s reasonable approval) and such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the Disqualified Individual’s right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedconditioned upon receipt of the requisite approval by the Company’s stockholders in a manner that complies with Section 280G(b)(5)(B) of the Code. The Company shall certify to Parent the receipt of the stockholder approval pursuant to this Section 5.07.
Appears in 1 contract
Samples: Merger Agreement (Proto Labs Inc)
Section 280G. To 9.1 Notwithstanding any other provision of this Agreement, except as set forth in Section 9.2, in the event that the Company undergoes a “Change in Ownership or Control” (as defined below), the Company shall not be obligated to provide to the Executive a portion of any “Contingent Compensation Payments” (as defined below) that the Executive would otherwise be entitled to receive to the extent that necessary to eliminate any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “excess parachute payments” (within as defined in Code Section 280G(b)(l)) for the meaning Executive. For purposes of this Section 280G(b)(2)(A9, the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Payments” and the aggregate amount (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior Contingent Compensation Payments so eliminated shall be referred to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (as the “Waived 280G BenefitsEliminated Amount.”) so that any remaining payments and/or benefits
9.2 Notwithstanding the provisions of 9.1, no such reduction in Contingent Compensation Payments shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either if (i) the requisite number of votes of holders Eliminated Amount (computed without regard to this sentence) exceeds (ii) 110% of the equity interests aggregate present value (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the Company was obtained amount of any additional taxes that would be incurred by the Executive if the Eliminated Payments (determined without regard to this sentence) were paid to him or her (including, state and federal income taxes on the Eliminated Payments, the excise tax imposed by Section 4999 of the Code payable with respect to all of the Waived 280G Benefits Contingent Compensation Payments in excess of the Executive’s “base amount” (as defined in Section 280G(b)(3) of the “280G Approval”) or (ii) the 280G Approval was not obtainedCode), and, and any withholding taxes). The override of such reduction in Contingent Compensation Payments pursuant to this Section 9.2 shall be referred to as a result“Section 9.2 Override.” For purpose of this paragraph, no Waived 280G Benefits if any federal or state income taxes would be attributable to the receipt of any Eliminated Payment, the amount of such taxes shall be made or providedcomputed by multiplying the amount of the Eliminated Payment by the maximum combined federal and state income tax rate provided by law.
9.3 For purposes of this Section 9 the following terms shall have the following respective meanings:
Appears in 1 contract
Samples: Employment Agreement (Achillion Pharmaceuticals Inc)
Section 280G. To In the extent event it shall be determined that any “disqualified individual” with respect to payment or distribution by the Company or any of its Affiliates affiliates to or for the benefit of Executive (within whether paid or payable or distributed or distributable pursuant to the meaning terms of this Agreement or otherwise) (the “Total Payments”), is or will be subject to the excise tax (the “Excise Tax”) imposed by Section 280G(c4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then the Total Payments shall be reduced to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the net after-tax benefit to Executive after reducing Executive’s Total Payments to the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax) benefit to Executive without such reduction. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payment made pursuant to Section 5(a)(ii) of this Agreement, then to the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected payment made pursuant to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A5(a)(iii) of this Agreement, then to the Code payment made pursuant to Section 5(a)(iv) of this Agreement, and then to any other payment that triggers such Excise Tax in the regulations thereunder, then, the Company will following order: (i) no later than four reduction of cash payments; (4ii) Business Days prior cancellation of accelerated vesting of performance-based equity awards (based on the reverse order of the date of grant); (iii) cancellation of accelerated vesting of other equity awards (based on the reverse order of the date of grant); and (iv) reduction of any other payments due to Executive (with benefits or payments in any group having different payment terms being reduced on a pro-rata basis). All mathematical determinations, and all determinations as to whether any of the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be Total Payments are “parachute payments” (within the meaning of Section 280G of the Code Code), that are required to be made under this paragraph, including determinations as to whether the Total Payments to Executive shall be reduced to the Safe Harbor Cap and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail assumptions to be approved as contemplated aboveutilized in arriving at such determinations, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedat the Company’s expense by a nationally recognized accounting firm mutually acceptable to the Company and Executive.
Appears in 1 contract
Samples: Employment Agreement (Global Power Equipment Group Inc.)
Section 280G. To The Company shall (a) prior to the extent that any Closing Date, solicit and use reasonable best efforts to obtain from each “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the any regulations promulgated thereunder) would who could otherwise receive or retain any payments payment or benefits that would reasonably be expected to could constitute a “parachute paymentspayment” (within the meaning of Section 280G(b)(2)(A) of the Code and the any regulations promulgated thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining no payments and/or or benefits shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the any regulations promulgated thereunder), ) and (iib) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), Date submit to a shareholder vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy satisfying the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalapproval materials, the Company shall provide drafts of such the calculations, waivers and disclosure and approval materials to Parent CBRG for its review and approval comment at least five (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (45) Business Days prior to soliciting such waivers and soliciting such approval, and the Company shall consider incorporation of any comments provided by CBRG in good faith. If any of the Waived 280G Benefits fail to be approved in accordance with the requirements of Section 280G(b)(5)(B) of the Code as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing DateClosing, if there are any Waived 280G Benefits, the Company shall deliver to Parent CBRG evidence reasonably acceptable to Parent CBRG that a vote of holders of the equity interests of the Company shareholders was solicited in accordance with the foregoing provisions of this Section 7.11 5.21 and that either (i) the requisite number of votes of holders of the equity interests of the Company shareholders was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made retained or provided.
Appears in 1 contract
Section 280G. To Prior to the extent Closing Date, the Company shall make Commercially Reasonable Efforts to obtain a vote of the Stockholders entitled to vote, in a manner that satisfies the shareholder approval requirements under Section 280G(b)(5)(B) of the Code and regulations promulgated thereunder (a “280G Stockholder Vote”), approving the right of any “disqualified individual” with respect (as defined in Section 280G(c) of the Code) to receive any payment or benefit that would reasonably be expected to be a “parachute payment” under Section 280G of the Company or any Code as a result of its Affiliates the consummation of the transactions contemplated by this Agreement (within the meaning of Section 280G(c280G(b)(2)(A)(i) of the Code and the regulations thereunderCode) would receive to avoid any payments payment received by, or benefits that would reasonably be expected to constitute benefit provided to, such “disqualified individual” from being an “excess parachute paymentspayment” (within the meaning of Section 280G(b)(2)(A280G(b)(1) of the Code (“Excess Parachute Payment”). The Company shall (a) provide drafts of any required waivers, consents or agreements and any materials necessary to comply with the regulations thereunder, then, the Company will (i) no later than four (4) Business Days 280G Stockholder Vote to Parent prior to submission to the Closing DateCompany’s disqualified individuals, use with respect to such waivers, consents or agreements, or the Company’s Stockholders entitled to vote, with respect to documentation necessary to comply with the 280G Stockholder Vote, and Parent shall have the right to review and provide reasonable best efforts comments, which may be incorporated, to the extent that they are timely provided by Parent and (b) make Commercially Reasonable Efforts to obtain all waivers, consents or agreements from each such “disqualified individual” a waiver individual of such disqualified individual’s rights to some or all of such payments or benefits (contingent on the transactions contemplated by this Agreement to avoid any payment or benefit that would reasonably be expected to be a “Waived parachute payment” under Section 280G Benefits”) so that any remaining payments and/or benefits of the Code from being an Excess Parachute Payment. Prior to the Closing, the Company shall provide Parent and its counsel with copies of all documents executed by the Stockholders and disqualified individuals in connection with the 280G Stockholder Vote. Notwithstanding the foregoing and for the avoidance of doubt, the obligations of the Company contained in this Section 5.14 shall not be deemed include obligations with respect to be payments or benefits pursuant to agreements or arrangements that create a right or entitlement to receive any “parachute paymentspayment” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of any “disqualified individual” under Section 280G(b)(5)(B)(ii) 280G of the Code and any regulations promulgated thereunder) the right of any that Parent or its Affiliates has provided to, or entered into with (or directed a Person to enter into with), such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval”, but of which the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will does not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedhave Knowledge.
Appears in 1 contract
Section 280G. To (a) If any payment or benefit (including payments and benefits pursuant to the extent Agreement) that any the Executive would receive in connection with a Change of Control or other transaction (the “disqualified individual” with respect to Transaction”) from the Company or otherwise (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for the sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of its Affiliates the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account the value of all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (x) the Executive shall have no rights to any additional payments and/or benefits constituting the Transaction Payment, and (y) reduction in payments and/or benefits shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit to the Executive as determined in the paragraph. If more than one method of reduction will result in the same economic benefit, the portions of the Transaction Payment shall be reduced pro rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Transaction Payment being subject to taxes pursuant to Section 409A that would not or otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification will preserve to the greatest extent possible, the greatest economic benefit for the Executive as determined on an after-tax basis; (B) as a second priority, any amounts of the Transaction Payment that are contingent on future events (e.g., being terminated without Cause), will be reduced (or eliminated) before any amounts of the Transaction Payment that are not contingent on future events; and (C) as a third priority, any amounts of the Transaction Payment that are “deferred compensation” within the meaning of Section 409A will be reduced (or eliminated) before any amounts of the Transaction Payment that are not deferred compensation within the meaning of Section 409A.
(b) Notwithstanding the foregoing, in the event that no stock of the Parent is readily tradeable on an established securities market or otherwise (within the meaning of Section 280G(c) 280G of the Code and Code) at the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) time of the Code Change of Control and to the regulations thereunder, thenextent allowable pursuant to Treas. Reg. §1.280G-1, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” Parent shall cause a waiver vote of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed shareholders to be held to approve the portion of the Transaction Payments that equals or exceeds three times (3x) the Executive’s “parachute paymentsbase amount” (within the meaning of Section 280G of the Code Code) (the “Excess Parachute Payments”) in accordance with Treas. Reg. §1.280G-1, and the regulations thereunder)Executive shall cooperate with such vote of shareholders, and (ii) no later than two (2) Business Days prior including the execution of any required documentation subjecting the Executive’s entitlement to all Excess Parachute Payments to such shareholder vote. In the Closing Date, with respect to each individual who agrees to event that the waiver described in clause (i), submit to Parent does not cause a vote of holders of shareholders to be held to approve all Excess Parachute Payments, the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of provisions set forth in Section 280G(b)(5)(B)(ii5.7(a) of the Code Agreement shall apply.
(c) Unless the Executive and the Company or otherwise agree in writing, any regulations promulgated thereunder) determination required under the right section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of any such “disqualified individual” to receive making the Waived calculations required by the section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G Benefitsand 4999 of the Code. Prior The Accountants shall provide detailed supporting calculations to soliciting such waivers the Company and approval, the Executive as requested by the Company or the Executive. The Executive and the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior furnish to the Closing Date, Accountants such information and documents as the Accountants may reasonably request in order to make a determination under the section. The Company shall deliver to Parent evidence bear all costs the Accountants may reasonably acceptable to Parent that a vote of holders of incur in connection with any calculations contemplated by the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedsection.
Appears in 1 contract
Section 280G. To Following the extent that any execution of this Agreement and prior to the Closing, the Company shall (a) use commercially reasonable efforts to obtain a waiver, from each Person who is reasonably expected to be a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations Treasury Regulations promulgated thereunder) with respect to any Group Company or any Blocker (each such Person, a “Disqualified Individual”), of that portion of such Disqualified Individual’s payments or benefits that would result in such Disqualified Individual’s receipt of any “excess parachute payment” (within the meaning of Section 280G of the Code and the Treasury Regulations promulgated thereunder) (collectively, “Excess Parachute Payments”), absent such waiver, and (iib) no later than two solicit a stockholder vote, pursuant to and in accordance with Section 280G(b)(5)(B) and Treasury Regulation Section 1.280G-1, Q&A-7, (2) Business Days prior to such approval, the Closing Date“280G Approval”), with respect to each individual who agrees any such waivers received, of the Excess Parachute Payments subject to such waivers, such that, if such payments and benefits are approved pursuant to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G BenefitsApproval, such payments and benefits shall not be deemed to be Excess Parachute Payments. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing DateClosing, the Company shall deliver to Parent the Purchaser evidence reasonably acceptable satisfactory to Parent the Purchaser that a vote of holders of the equity interests of the Company 280G Approval was solicited in accordance conformance with Section 280G of the foregoing provisions of this Section 7.11 Code and the Treasury Regulations promulgated thereunder, and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) Approval was obtained, or (ii) that the 280G Approval was not obtained, and, as a resultconsequence, no Waived 280G Benefits such Excess Parachute Payments shall not be made or provided, pursuant to the waivers of the Excess Parachute Payments that were executed by the Disqualified Individuals. The Company shall prepare all documents in connection with this Section 8.07, including the parachute payment calculations prepared by the Company and any amendment or supplement thereto (the “280G Documents”), and deliver the 280G Documents to the Purchaser within five (5) days prior to the Closing Date. The Purchaser and its counsel shall be given at least three (3) Business Days to review and comment on the 280G Documents before such materials are submitted for 280G Approval, and the Company shall consider in good faith all comments of the Company and its counsel in connection therewith. Notwithstanding the foregoing, to the extent that any Contract, agreement, arrangement or plan is entered into by or at the direction of Purchaser, the Surviving Company or any of their Affiliates and a Disqualified Individual prior to the Closing Date (the “Purchaser Arrangements”), the Purchaser shall provide a copy of such Contract, agreement, arrangement or plan to the Company at least ten (10) days before the Closing Date and shall cooperate with the Company in good faith in order to calculate or determine the value (for the purposes of Section 280G of the Code) of any payments or benefits granted or contemplated therein that could constitute a “parachute payment” under Section 280G of the Code; provided that the Company’s failure to include any Purchaser Arrangements in the stockholder voting materials described herein that the Purchaser fails to provide to the Company at least ten (10) days before the Closing Date, or because the Purchaser provides materially incomplete or materially incorrect information, will not result in a breach of the covenants set forth in this Section 8.07.
Appears in 1 contract
Samples: Equity Purchase and Merger Agreement (Roper Technologies Inc)
Section 280G. To (a) Each of the Acquired Companies shall obtain, prior to the initiation of the equityholder approval procedure described in Section 7.04(c), from each Person to whom any payment or benefit is required or proposed to be made that could constitute “parachute payments” under Section 280G(b)(2) of the Code and Treasury Regulations promulgated thereunder (“Section 280G Payments”), a written agreement waiving such Person’s right to receive some or all of such payment or benefit (the “Waived Benefits”), to the extent necessary so that all remaining payments and benefits applicable to such Person shall not be deemed a parachute payment, and accepting in substitution for the Waived Benefits the right to receive the Waived Benefits only if approved by the equityholders of any of the Acquired Companies in a manner that complies with Section 280G(b)(5)(B) of the Code and the Treasury Regulations issued thereunder.
(b) In connection with the foregoing, the Purchaser shall provide the Seller with information and documents necessary to allow the Acquired Companies to determine whether any payments made or to be made or benefits granted or to be granted pursuant to any employment agreement or other agreement, arrangement or contract entered into or negotiated by the Purchaser or any of its respective Affiliates (“Purchaser Payments”), together with all Section 280G Payments, could reasonably be considered to be “parachute payments” within the meaning of Section 280G(b)(2) of the Code at least ten (10) Business Days prior to the Closing Date (and shall further provide any such updated information as is necessary prior to the Closing Date).
(c) Prior to the Closing, each of the Acquired Companies shall obtain the approval by such number of equityholders of the Company in a manner that complies with the terms of Section 280G(b)(5)(B) of the Code and the Treasury Regulations thereunder, including Q‑7 of Section 1.280G‑1 of such Treasury Regulations, of the right of each Person described in Section 7.04(a) to receive or retain, as applicable, such Person’s Waived Benefits, provided that in no event shall this Section 7.04 be construed to require the Company or any of the other Acquired Companies to compel any Person to waive any existing rights under any contract or agreement that such Person has with the Company, such Acquired Company or any other Person, and in no event shall the Company or any of the other Acquired Companies be deemed in breach of this Section 7.04 if any such Person refuses to waive any such rights or if the equityholders fail to approve any Waived Benefits.
(d) Notwithstanding anything to the contrary in this Section 7.04 or otherwise in this Agreement, to the extent the Purchaser has provided misinformation, or the Purchaser’s omission of information has resulted in misinformation, with respect to any Purchaser Payments, (i) there shall be no breach of the representation contained in Section 5.09 or the covenant contained herein and (ii) for all purposes of this Agreement, including the calculation of any Taxes pursuant to Article XII, no payment by, or benefit provided to, any “disqualified individual” with respect to the Company whom such misinformation or any of its Affiliates (within the meaning of omission was provided shall be a “parachute payment” under Section 280G(c280G(b) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedCode.
Appears in 1 contract
Section 280G. To the extent that any “disqualified individual” with respect necessary to avoid the Company or any of its Affiliates (within the meaning application of Section 280G(c) 280G of the Code and the Treasury regulations thereunder, (i) would receive during the period commencing on the date hereof and ending on the date that is three (3) Business Days prior to the Closing Date, the Company shall request waivers (the “Parachute Payment Waivers” ) from each Person who has a right to any payments and/or benefits as a result of or benefits in connection with the transactions contemplated by this Agreement that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) 280G of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior as to the Closing Date, use reasonable best efforts to obtain from each which such “disqualified individual” a waiver of such disqualified individual’s Person waives his or her rights to some or all of such payments or and/or benefits (the “Waived 280G Benefits”) applicable to such Person so that any all remaining payments and/or benefits applicable to such Person shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunderCode), and (ii) no later than following the execution of the waivers described in clause (i) and prior to the Closing Date, solicit the approval of the stockholders of the Company of any Waived 280G Benefits pursuant to a vote intended to meet the requirements of Section 280G(b)(5)(B) of the Code and the Treasury regulations thereunder. At least two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the obtaining any waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to or soliciting such waivers and stockholder approval, the Company shall provide drafts Parent with copies of such all Section 280G-related documents, including, without limitation, any Section 280G analysis prepared by the Company, the stockholder disclosure document, waivers and disclosure and approval materials to Parent stockholder consents, for its Parent’s review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers comment and soliciting such approvalshall consider all reasonable comments made thereto by Parent. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior Prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests stockholders of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 6.9 and that either (iA) the requisite number of votes of holders of the equity interests of the Company was were obtained with respect to the Waived 280G Benefits (the “Section 280G Approval”) ), or (iiB) that the Section 280G Approval was not obtained, and, as a resultconsequence, no the Waived 280G Benefits shall not be made or provided; provided, that the Parties agree that this Section 6.9 shall not be deemed breached, and no stockholder vote shall be required pursuant to Section 4.11(h), with respect to (x) any 280G Payment to any such Person that refuses to execute a Parachute Payment Waiver or (y) the value of any arrangement entered into by or at the direction of Parent or its Affiliates, the material terms (including value) of which are not disclosed to the Company prior to the date that is at least five (5) Business Days prior to the Closing Date.
Appears in 1 contract
Samples: Merger Agreement (AdaptHealth Corp.)
Section 280G. To Prior to the extent that Closing, the Company shall (a) solicit from any Person who (i) is a “disqualified individual” (as defined in Section 280G of the Code) and (ii) has a right or potential right to any payments and/or benefits in connection with respect the transactions contemplated by this Agreement that could be deemed to the Company or any of its Affiliates (within the meaning of constitute “excess parachute payments” pursuant to Section 280G(c) 280G of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of all or a portion of such disqualified individualPerson’s rights to some or any “excess parachute payments”, such that all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits applicable to such Person shall not be deemed to be “parachute payments” (within the meaning of pursuant to Section 280G of the Code and (the regulations thereunder“Waived 280G Benefits”), and (iib) no for all such obtained waivers, submit for approval by the Company’s stockholders the Waived 280G Benefits, in accordance with the requirements of Sections 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code. No later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to before soliciting such waivers and approvalwaivers, the Company shall provide to Purchaser and its counsel drafts of such waivers the consent, waiver, disclosure statement and disclosure and calculations necessary to effectuate the approval materials to Parent process for its review and approval shall consider any comments in good faith. At least seven (which approval will not be unreasonably withheld, conditioned or delayed7) no later than four (4) Business Days days prior to soliciting such waivers the Closing, Purchaser shall disclose to the Company all material terms and soliciting such approvalvalues regarding (x) any payment or benefit provided by Purchaser or an Affiliate of Purchaser (other than the Company) and (y) any payment or benefit provided by the Company at Purchaser’s direction or pursuant to an agreement entered into by the Company at Purchaser’s direction, in each case, to any Person who is a “disqualified individual” (clauses (x) and (y) are collectively defined as “Purchaser Arrangements”). If any of Purchaser fails to comply with the Waived 280G Benefits fail to be approved as contemplated abovepreceding sentence, such Waived 280G Benefits the Company shall not be made or providedviolation of this Section 6.14 if it solicits the stockholder vote without including the Purchaser Arrangements. To the extent applicable, prior Prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) notify Purchaser whether or not the requisite number of votes of holders of the equity interests of the Company was stockholder approval has not been obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedBenefits.
Appears in 1 contract
Samples: Merger Agreement (Compass Group Diversified Holdings LLC)
Section 280G. To (a) If any payment or benefit (including payments and benefits pursuant to this Agreement) that Executive would receive in connection with a Change in Control or other transaction (the extent that any “disqualified individual” with respect to Transaction”) from the Company or any otherwise would (i) constitute a “parachute payment” within the meaning of its Affiliates Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) (a “Payment”) and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall make payment to Executive of a Gross-Up Payment in accordance with the provisions of Appendix II attached to this Agreement.
(b) Notwithstanding the foregoing, in the event that no stock of the Company is readily tradeable on an established securities market or otherwise (within the meaning of Section 280G(c) 280G of the Code and Code) at the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) time of the Code and Change in Control of the regulations thereunder, thenCompany, the Company will (i) no later than four (4) Business Days prior shall cause a vote of shareholders to be held with respect to the Closing Date, use reasonable best efforts to obtain from each such approval of the portion of the Transaction Payments that exceeds three times Executive’s “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute paymentsbase amount” (within the meaning of Section 280G of the Code and Code) (the regulations thereunder)“Excess Parachute Payments”) in accordance with Treas. Reg. §1.280G-1, and (ii) no later than two (2) Business Days prior Executive shall cooperate with such vote of shareholders, including the execution of any required documentation subjecting Executive’s entitlement to all Excess Parachute Payments to such shareholder vote. In the Closing Date, with respect to each individual who agrees to event that the waiver described in clause (i), submit to Company does not cause a vote of holders shareholder to be held to approve all Excess Parachute Payments, the provisions set forth in Section 5.7(a) shall apply.
(c) Unless Executive and the Company otherwise agree in writing, any determination required under this section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the equity interests of Code. The Accountants shall provide detailed supporting calculations to the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy and Executive as requested by the requirements of Section 280G(b)(5)(B)(ii) of the Code Company or Executive. Executive and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of furnish to the Accountants such waivers information and disclosure documents as the Accountants may reasonably request in order to make a determination under this section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this section as well as any costs incurred by Executive with the Accountants for tax planning under Sections 280G and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any 4999 of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedCode.
Appears in 1 contract
Section 280G. To As promptly as reasonably practicable after the extent that any “disqualified individual” with respect to date hereof, the Company shall make available to Buyer the information (other than information related to plans, policies, agreements and arrangements which are sponsored or maintained by Buyer or any of its Affiliates or to which Buyer or any of its Affiliates are a party or otherwise bound (within the meaning of “Buyer Arrangements”)) necessary to accurately calculate any excise tax due under Section 280G(c) 4999 of the Code and the regulations thereunder) would receive as a result of any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such transactions contemplated by this Agreement for a “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code Code) (“Excise Taxes”) and the regulations thereunder)amount of deductions that may be disallowed for the Company under Section 280G of the Code (“Deduction Losses”) in connection with any of the transactions contemplated by this Agreement. The Buyer shall reasonably cooperate in providing information to the Company necessary to calculate the Excise Taxes and Deduction Losses. The Company shall use commercially reasonable efforts to seek waivers from any “disqualified individuals,” pursuant to which such individuals will waive any and all payments (or other benefits) contingent on the consummation of the transactions contemplated by this Agreement (within the meaning of Section 280G(b)(2)(A)(i) of the Code) to the extent necessary so that no payment received by such “disqualified individual” shall be a “parachute payment” under Section 280G(b) of the Code (determined without regard to Section 280G(b)(4) of the Code) (“Waived Payments”) unless and until shareholder approval of the Waived Payments is received in accordance with Section 280G of the Code. To the extent such waivers are obtained, and the Company shall, not less than three (ii) no later than two (23) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders stockholder vote, in a manner that satisfies the stockholder approval requirements under Section 280G(b)(5)(B) of the equity interests Code and the Treasury Regulations promulgated thereunder, the right of any “disqualified individual” (as defined in Section 280G(c) of the Code) to receive the Waived Payments. Such vote shall establish the disqualified individual’s right to the Waived Payments if approved by the Seller. In addition, the Company entitled to vote on such matters (along with shall provide adequate disclosure intended to satisfy the requirements Seller of all material facts concerning all Waived Payments for any such disqualified individual that, but for such vote, could be deemed “parachute payments” under Section 280G of the Code in a manner that satisfies Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval At least three (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (43) Business Days prior to soliciting such waivers the vote, the Buyer and soliciting such approval. If any of its counsel shall be given the Waived 280G Benefits fail right to review and comment on all documents required to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior delivered to the Closing DateSeller in connection with such vote and any disqualified individual waivers, and the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders reflect all comments of the equity interests Buyer or its counsel thereon. Buyer and its counsel shall be provided copies of all documents executed by the Company was solicited stockholders and disqualified individuals in accordance connection with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedvote.
Appears in 1 contract
Samples: Stock Purchase Agreement (Progress Software Corp /Ma)
Section 280G. To the extent that any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would has the right to receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder), then, the Company will will, (i) no later than four (4) Business Days prior to the Closing Date, solicit and use its reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along matters, in conformity with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any regulations promulgated thereunder) Code, the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior The parties acknowledge that this Section 6.16 shall not apply to soliciting such waivers any arrangements entered into at the direction of Buyer or between Buyer and approvalits Affiliates, on the Company shall provide drafts of such waivers one hand, and disclosure and approval materials a disqualified individual, on the other hand (“Buyer Arrangements”). In the event that Buyer provides to Parent for its review and approval the Company, no less than fifteen (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (415) Business Days prior to the Effective Time, a written description of any Buyer Arrangements and the value for purposes of Section 280G of the Code of such Buyer Arrangements, the Company shall include such description and value(s) in any materials disclosed to Shareholders in connection with soliciting approval in accordance with this Section 6.16; provided, however, that compliance with the remainder of this Section 6.16 shall be determined as if such waivers Buyer Arrangements had not been entered into. The parties hereto acknowledge that the Company cannot compel any disqualified individual to waive any existing rights under a contract with the Company or any of the Company Subsidiaries and soliciting the Company shall not be deemed in breach of this Section 6.16 with respect to any disqualified individual who refuses to waive any such approvalright. If The Company shall provide Buyer a reasonable opportunity to review and comment on any and all documents prepared by the Company in connection with this Section 6.16. No less than three (3) Business Days prior to the Effective Time, the Company shall deliver to Buyer certification that the vote of the holders of the equity interests of the Company entitled to vote was solicited in conformity with the requirements of Section 280G(b)(5)(B) of the Code and that either (x) the requisite equityholder approval of the Waived 280G Benefits fail to be approved was obtained or (y) such approval was not obtained and, as contemplated abovea consequence, such that the Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided.
Appears in 1 contract
Samples: Merger Agreement (Murphy USA Inc.)
Section 280G. To (a) Notwithstanding anything in this Agreement to the extent contrary, in the event that any payment or benefit received or to be received by Executive or the termination of Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits being hereinafter referred to as the “disqualified individual” with respect to Total Payments”) would not be deductible (in whole or part) by the Company or any of its Affiliates (within the meaning making such payment or providing such benefit as a result of Section 280G(c) 280G of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts extent necessary to obtain from each make such “disqualified individual” a waiver portion of such disqualified individual’s rights to some or all of such payments or benefits the Total Payments deductible (and after taking into account any reduction in the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning Total Payments provided by reason of Section 280G of the Code and in such other plan, arrangement or agreement), the regulations thereunderportion of the Total Payments that do not constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with cash payments being reduced before non-cash payments, and payments to be paid last being reduced first.
(b) For purposes of this limitation, (i) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no later than two portion of the Total Payments shall be taken into account which, in the opinion of tax counsel (2“Tax Counsel”) Business Days reasonably acceptable to Executive and selected by the accounting firm which was, immediately prior to the Closing DateChange in Control, with respect to each individual who agrees to the waiver described in clause Company’s independent auditor (ithe “Auditor”), submit to does not constitute a vote of holders of “parachute payment” within the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements meaning of Section 280G(b)(5)(B)(ii280G(b)(2) of the Code and any regulations promulgated thereunderCode, including by reason of Section 280G(b)(4)(A) of the Code; (iii) the right of any such “disqualified individual” severance payments payable to receive the Waived 280G Benefits. Prior Executive pursuant to soliciting such waivers and approval, the Company Section 5 hereof shall provide drafts of such waivers and disclosure and approval materials be reduced only to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior necessary so that the Total Payments (other than those referred to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either clauses (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) of this paragraph) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions by reason of Section 280G Approval was not obtainedof the Code, and, as a result, no Waived 280G Benefits in the opinion of Tax Counsel; and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be made determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
(c) If it is established pursuant to a final determination of a court of competent jurisdiction or providedan Internal Revenue Service proceeding that, notwithstanding the good faith of Executive and the Company in applying the terms of this Section 7, the Total Payments paid to or for Executive’s benefit are in an amount that would result in any portion of such Total Payments being subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, if such repayment would result in (i) no portion of the remaining Total Payments being subject to the Excise Tax and (ii) a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, the Executive shall have an obligation to pay the Company upon demand an amount equal to the sum of (x) the excess of the Total Payments paid to or for Executive’s benefit over the Total Payments that could have been paid to or for Executive’s benefit without any portion of such Total Payments being subject to the Excise Tax; and (y) interest on the amount set forth in clause (x) of this sentence at the rate provided in Section 1274(b)(2)(B) of the Code from the date of Executive’s receipt of such excess until the date of such payment.
Appears in 1 contract
Samples: Employment Agreement (Hcp, Inc.)
Section 280G. To Notwithstanding any other provision of this Plan, except as set forth in Section 14(b), in the event that the Company undergoes a “Change in Ownership or Control” (as defined below), the following provisions shall apply:
(a) The Company shall not be obligated to provide to the Covered Employee any portion of any “Contingent Compensation Payments” (as defined below) that the Covered Employee would otherwise be entitled to receive to the extent that necessary to eliminate any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “excess parachute payments” (within the meaning of as defined in Section 280G(b)(2)(A280G(b)(1) of the Code Code) for the Covered Employee. For purposes of this Section 14, the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Payments” and the regulations thereunderaggregate amount (determined in accordance with Treasury Regulation Section 1.280G-1, thenQ/A-30 or any successor provision) of the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Amount.”
(b) Notwithstanding the provisions of Section 14(a), no such reduction in Contingent Compensation Payments shall be made if (1) the Eliminated Amount (computed without regard to this sentence) exceeds (2) 100% of the aggregate present value (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the amount of any additional taxes that would be incurred by the Covered Employee if the Eliminated Payments (determined without regard to this sentence) were paid to the Covered Employee (including state and federal income taxes on the Eliminated Payments, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of excise tax imposed by Section 280G 4999 of the Code and payable with respect to all of the regulations thereunderContingent Compensation Payments in excess of the Covered Employee’s “base amount” (as defined in Section 280G(b)(3) of the Code), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (iany withholding taxes), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts The override of such waivers and disclosure and approval materials reduction in Contingent Compensation Payments pursuant to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i14(b) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided.referred to as a
Appears in 1 contract
Section 280G. To the extent that any Each Subject Company will use commercially reasonable efforts to secure from each Person who is a “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of as defined in Section 280G(c) of the Code and (each, a “Disqualified Individual”) to whom any payment or benefit is required or proposed to be made in connection with the regulations thereunder) would receive any payments or benefits transactions contemplated by this Agreement that would reasonably be expected to could constitute “parachute payments” (within the meaning of under Section 280G(b)(2)(A280G(b)(2) of the Code and the regulations thereunder, then, the Company will (i“Section 280G Payments”) no later than four (4) Business Days prior a written agreement waiving such Disqualified Individual’s right to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to receive some or all of such payments payment or benefits benefit (the “Waived 280G Benefits”) ), to the extent necessary so that any all remaining payments and/or and benefits shall applicable to such Disqualified Individual will not be deemed to be “parachute payments” , and accepting in substitution for the Waived Benefits the right to receive the Waived Benefits only if approved by the equityholders of such Subject Company in a manner that complies with Section 280G(b)(5)(B) of the Code (within the meaning “280G Stockholder Approval”). Prior to the Closing, each Subject Company will submit the Waived Benefits of each Disqualified Individual who has executed a waiver in accordance with this Section 11.7 for approval of such Subject Company’s equityholders and such Disqualified Individual’s right to receive the Waived Benefits will be conditioned upon receipt of the requisite approval by such equityholders in a manner that complies with Section 280G(b)(5)(B) of the Code; provided, in no event will this Section 11.7 be construed to require such Subject Company (or any of its Affiliates) to compel any Disqualified Individual to waive any existing rights under any contract or agreement that such Disqualified Individual has with Sellers, such Subject Company or any other Person, and in no event will such Subject Company (or any of its Affiliates) be deemed in breach of this Section 11.7 if any such Disqualified Individual refuses to waive any such rights or if such equityholders fail to approve any Waived Benefits. Within a reasonable time prior to seeking any waiver of the Waived Benefits and the 280G Stockholder Approval, the Subject Company will provide Purchaser’s counsel with a copy of the waiver agreement, the disclosure statement, equityholder consent and calculations prepared in connection with the actions contemplated by this Section 11.7 and such Subject Company will consider in good faith any changes reasonably requested by Purchaser or its counsel. Prior to the Closing, the Subject Company will deliver to Purchaser notification that either (a) the 280G Stockholder Approval was obtained with respect to the Section 280G Payments or (b) the 280G Stockholder Approval was not obtained with respect to the Section 280G Payments and that, as a consequence, no Waived Benefits will be paid. Notwithstanding the foregoing, to the extent that any contract, agreement, or plan is entered into by Purchaser or any of its Affiliates and a Disqualified Individual in connection with the transactions contemplated by this Agreement before the Closing Date (the “Purchaser Arrangements”), Purchaser shall provide a copy of such contract, agreement or plan to the Subject Company before the Closing Date and shall cooperate with such Subject Company in good faith in order to calculate or determine the value (for the purposes of Section 280G of the Code and Code) of any payments or benefits granted or contemplated therein, that may be paid or granted in connection with the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to transactions contemplated by this Agreement that could constitute a vote of holders “parachute payment” under Section 280G of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and Code; provided that, in any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated aboveevent, such Waived 280G Benefits shall not be made or provided. To Subject Company’s failure to include the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited Purchaser Arrangements in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Stockholder Approval was materials described herein, for any reason, will not obtained, and, as result in a result, no Waived 280G Benefits shall be made or providedbreach of the covenants set forth in this Section 11.7.
Appears in 1 contract
Section 280G. To Notwithstanding anything in this Agreement or otherwise to the extent contrary, in the event that any “disqualified individual” with respect to payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Issuer, the Company or any member of the Company Group, or any entity that effectuates a change of control (or any of its Affiliates affiliates) to or for the benefit of the Employee (whether pursuant to the terms of this Agreement or any other plan, equity-based award, arrangement, agreement or otherwise) (all such payments, awards, benefits and/or distributions being hereinafter referred to as the “Total Payments”) would be subject to the excise tax under Section 4999 of the Code (or any successor provision) (the “Excise Tax”), then:
(a) If no “stock” of the Company Group is then “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(c280G(b)(5)(A)(ii)(I) of the Code and Code, prior to the regulations thereunderclosing of the applicable transaction, the Company (or the applicable corporation undergoing a change in control) would receive shall make good faith efforts to obtain shareholder approval of the Total Payments, such that upon shareholder approval, such portion of the Total Payments shall be not subject to the Excise Tax. The Employee shall fully cooperate to ensure that such shareholder approval of all such Total Payments is valid (including by executing all required waivers). Failure to obtain such shareholder approval following good faith efforts of the Company (or the applicable corporation undergoing a change in control) shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax. In addition, the Employee can voluntarily decide not to execute the waiver, in which case the failure of the Company (or benefits the applicable corporation undergoing a change in control) to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax.
(b) In the event that would reasonably be expected to constitute (i) the shareholder approval described in Section 19(a) is not obtained or (ii) the “parachute paymentsstock” (of the Company Group is “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(2)(A280G(b)(5)(A)(ii)(I) of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Dateextent necessary to make such portion of the Total Payments not subject to the Excise Tax, use reasonable best efforts to obtain from each such “disqualified individual” a waiver the portion of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so Total Payments that any remaining payments and/or benefits shall do not be deemed to be “parachute payments” (constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with any such reduction being made as follows: cash payments being reduced before equity-based compensation or other non-cash compensation or benefits, in each case, in reverse order beginning with payments or benefits that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code, provided that, in the case of all of the foregoing Total Payments, all amounts that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) as would result in no portion of the payments being considered “excess parachute payments” under Section 280G of the Code.
(c) Section 19(b) shall not apply and no reduction of Total Payments will occur if (i) clause 19(b)(ii) is applicable and (ii) (1) the net amount of such Total Payments, as reduced pursuant to Section 19(b) (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is less than (2) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of excise tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(d) Any determinations that are made pursuant to this Section 19 shall be made by a nationally recognized certified public accounting firm that shall be selected by the Company (and paid by the Company) prior to any transaction that is subject to Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G ApprovalAccountant”) or (ii) the 280G Approval was not obtained), and, as a result, no Waived 280G Benefits which determination shall be made or providedcertified by the Accountant and set forth in a certificate delivered to the Employee setting forth in reasonable detail the basis of the Accountant’s determinations.
Appears in 1 contract
Samples: Employment Agreement (Duck Creek Technologies, Inc.)
Section 280G. To Prior to the extent that Closing, the Company shall (i) solicit from any Person who is a “disqualified individual,” with respect to the Company or any of its Affiliates (within the meaning of as defined in Section 280G(c) 280G of the Code Code, of any Group Company and the regulations thereunder) would receive who has a right to any payments or benefits or potential right to any payments and/or benefits in connection with the consummation of the Transactions that would reasonably be expected deemed to constitute “parachute payments” (within the meaning of pursuant to Section 280G(b)(2)(A) 280G of the Code and the regulations thereunderCode, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individualPerson’s rights to some or all of any such payments or benefits (applicable to such Person to the “Waived 280G Benefits”) so extent that any all remaining payments and/or or benefits applicable to such Person shall not be deemed to be “parachute payments” pursuant to Section 280G of the Code (within the meaning “Waived 280G Benefits”) and (ii), if such waiver is obtained from any disqualified individual, submit for approval to the stockholders of the applicable Group Company the Waived 280G Benefits, in the manner required under Sections 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code. No later than five (5) Business Days prior to seeking any waiver or approval, the Company shall deliver to the Buyer drafts of all waivers, consents, disclosures, and other documents prepared in connection with the actions described in this Section 7.18 for the Buyer’s review and comment, in order to ensure that the Buyer is satisfied that the stockholder approval will be sought in accordance with Section 280G(b)(5)(B) of the Code and the Treasury Regulations promulgated thereunder. The Group Companies shall not pay any of the Waived 280G Benefits if such payment is not approved by the stockholders of the applicable Group Company as contemplated above. Prior to the Closing Date, the Company shall deliver to the Buyer evidence satisfactory to the Buyer that a vote of the stockholders was received in conformance with Section 280G of the Code and the regulations thereunder), and (ii) no later than two (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on or that such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and requisite stockholder approval materials to Parent for its review and approval (which approval will has not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was been obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtainedBenefits, and, as a resultconsequence, no the Waived 280G Benefits have not been and shall not be made or provided.
Appears in 1 contract
Samples: Equity Purchase Agreement (BrightSphere Investment Group Inc.)
Section 280G. To (a) Prior to the Closing Date, the Company and each of its Subsidiaries shall use reasonable best efforts to seek, prior to the initiation of the equityholder approval procedure described in Section 7.04(c), from each Person to whom any payment or benefit is required or proposed to be made that could constitute “parachute payments” under Section 280G(b)(2) of the Code and Treasury Regulations promulgated thereunder (“Section 280G Payments”), a written agreement waiving such Person’s right to receive some or all of such payment or benefit (the “Waived Benefits”), to the extent necessary so that any “disqualified individual” with respect all remaining payments and benefits applicable to such Person shall not be deemed a parachute payment, and accepting in substitution for the Waived Benefits the right to receive the Waived Benefits only if approved by the equityholders of the Company or any of and its Affiliates (within the meaning of applicable Subsidiaries in a manner that complies with Section 280G(c280G(b)(5)(B) of the Code and the regulations Treasury Regulations issued thereunder.
(b) would receive In connection with the foregoing, Parent shall provide Seller at least fifteen (15) days prior to the Closing Date with all information and documents necessary to allow the Company and each of its Subsidiaries to determine whether any payments made or to be made or benefits that would granted or to be granted pursuant to any employment agreement or other agreement, arrangement or Contract entered into or negotiated by Parent, Purchaser, Merger Sub or any of their respective Affiliates (“Parent Payments”), together with all Section 280G Payments, could reasonably be expected considered to constitute be “parachute payments” (within the meaning of Section 280G(b)(2)(A280G(b)(2) of the Code and the regulations thereunderCode; provided, thenthat, the Company Company’s failure to include the Parent Payments in the equityholder voting materials described herein, due to a direct result of Parent’s breach of its obligations set forth herein, will not result in a breach of this Section 7.04. At least ten (i) no later than four (410) Business Days prior to the Closing Date, the Company shall provide Parent for its review and comment with drafts of disclosure and approval documents, “disqualified individual” waivers, and Section 280G calculations, and the Company shall incorporate into such documents any reasonable comments that are timely provided by Parent.
(c) Prior to the Closing Date, the Company and each of its Subsidiaries shall use its reasonable best efforts to obtain from each such “disqualified individual” a waiver the approval by equityholders of such disqualified individual’s rights to some or all of such payments or benefits (Company in a manner that complies with the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning terms of Section 280G 280G(b)(5)(B) of the Code and the regulations Treasury Regulations thereunder), including Q-7 of Section 1.280G-1 of such Treasury Regulations, of the right of each Person described in Section 7.04(a) to receive or retain, as applicable, such Person’s Waived Benefits, provided that in no event shall this Section 7.04 be construed to require the Company or any of its Subsidiaries to compel any Person to waive any existing rights under any Contract or agreement that such Person has with the Company, such Subsidiary or any other Person, and in no event shall the Company or any of its Subsidiaries be deemed in breach of this Section 7.04 if any such Person refuses to waive any such rights or if the equityholders fail to approve any Waived Benefits.
(iid) no later than two (2) Business Days prior Notwithstanding anything to the Closing Datecontrary in this Section 7.04 or otherwise in this Agreement, to the extent Parent has provided misinformation, or Parent’s omission of information has resulted in misinformation, with respect to each individual who agrees to the waiver described any Parent Payments and, in clause (i)either case, submit this has directly resulted in a “parachute payment” to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalthat otherwise would not have been a “parachute payment, the Company then there shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any breach of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made representation contained in Section 5.15(g)(i) or provided. To this Section 7.04 or the extent applicable, prior covenant contained herein.
(e) Prior to the Closing Date, the Company shall deliver to provide Parent evidence reasonably acceptable to Parent that a vote and its counsel with copies of holders of all documents executed by the equity interests of the Company was solicited equityholders and disqualified individuals in accordance connection with the foregoing provisions of vote contemplated by this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided7.04.
Appears in 1 contract
Section 280G. To the extent that any “disqualified individual” with respect Notwithstanding anything in this Agreement to the Company contrary, if any payment or any of its Affiliates distribution Executive would receive pursuant to this Agreement or otherwise (within the meaning of Section 280G(c) of the Code and the regulations thereunder“Payment”) would receive any payments or benefits that would reasonably be expected to (a) constitute a “parachute paymentspayment” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder)Code, and (iib) no later than two (2) Business Days prior but for this sentence, be subject to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of excise tax imposed by Section 280G(b)(5)(B)(ii) 4999 of the Code and any regulations promulgated thereunder(the “Excise Tax”), then such Payment shall either be (i) the right of any delivered in full, or (ii) delivered as to such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts lesser extent which would result in no portion of such waivers and disclosure and approval materials Payment being subject to Parent for its review and approval (which approval will not be unreasonably withheldthe Excise Tax, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any whichever of the Waived 280G Benefits fail to foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the largest payment, notwithstanding that all or some portion of the Payment may be approved as contemplated above, such Waived 280G Benefits shall not be made or providedtaxable under Section 4999 of the Code. To the extent applicableThe Company shall, prior to the Closing Dateeffective date of the Change in Control, appoint an accounting firm or firm specializing in Section 280G of the Code to perform the foregoing calculations. The Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained bear all expenses with respect to the Waived 280G Benefits (determinations by such accounting firm required to be made hereunder. Any good faith, reasonable determinations of the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits accounting firm made hereunder shall be made final, binding and conclusive upon the Company (and successors) and Executive. Any reduction in payments and/or benefits pursuant to this Section 23 will occur in the following order: (1) reduction of cash payments the full amount of which are treated as parachute payments; (2) reduction in payments due in respect of equity awards the full amount of which are treated as parachute payments; (3) reduction of cash payments less than the full amount of which are treated as parachute payments, with the highest values reduced first; (4) reduction in payments due in respect of equity awards less than the full amount of which are treated as parachute payments, with the highest values reduced first; and (5) reduction of other benefits payable to Executive, with the highest values reduced first. Nothing in this Section 23 shall require the Company or providedany of its affiliates to be responsible for, or have any liability or obligation with respect to, Executive’s excise tax liabilities under Section 4999 of the Code.
Appears in 1 contract
Section 280G. To the extent that any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior Prior to the Closing Date, the Company shall use reasonable best efforts to obtain from each such “disqualified individual” (as defined in Section 280G(c) of the Code) a waiver of such disqualified individual’s rights to some or all of such any payments or benefits (that might otherwise reasonably result in the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be payment or provision of “parachute payments” (within as defined in Section 280G(b)(2) of the meaning Code) or that might be subject to an excise Tax under Section 4999 of the Code, such that after giving effect to all waivers, the Seller, the Company, and the Purchaser have not made or provided, nor are required to make or provide, any payments or benefits that would not be deductible under Section 280G of the Code or that would be subject to an excise Tax under Section 4999 of the Code (the payments and benefits waived (which, for the avoidance of doubt, shall be, with respect to any individual, the amounts in excess of 299% of such individual’s “base amount” (as defined in Section 280G(b)(3) of the Code)) shall be collectively referred to as the “Section 280G Waived Payments”). At least five days prior to the Closing Date, the Seller and the Company shall submit, accompanied by adequate disclosure, for shareholder approval all Section 280G Waived Payments in accordance with the terms of Section 280G(b)(5)(B) of the Code and the Treasury Regulations thereunder with the purpose of determining the right of each “disqualified individual” to receive the Section 280G Waived Payments by rendering the parachute payment provisions of Section 280G of the Code inapplicable to any and all payments and benefits provided by the regulations thereunder)Seller or the Company to those individuals who have executed a waiver pursuant to this Section 7.6 that, in the absence of such waiver, might otherwise reasonably result in the provision of any payments or benefits that would be a “parachute payment” under Section 280G of the Code. The Seller shall provide to the Purchaser, no later than five (5) days prior to obtaining the waivers, (i) drafts of any waivers, disclosure documents, shareholder consent forms and other relevant documents relating to the waiver and vote prepared by the Seller or the Company in connection with this Section 7.6 and (ii) no later than two (2) Business Days reasonable documentation regarding the determination of the Section 280G Waived Payments. Seller and the Company, as applicable, shall incorporate any comments made by the Purchaser prior to obtaining the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or providedvote.
Appears in 1 contract
Samples: Securities Purchase Agreement (Vahanna Tech Edge Acquisition I Corp.)
Section 280G. To (a) If any payment or benefit (including payments and benefits pursuant to this Agreement) that the extent that any Executive would receive in connection with a Change of Control or other transaction (the “disqualified individual” with respect to Transaction”) from the Company or any of its Affiliates otherwise (within the meaning of Section 280G(c) of the Code and the regulations thereunder“Transaction Payment”) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” constitute a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute paymentspayment” (within the meaning of Section 280G of the Code and the regulations thereunder)Code, and (ii) no later than but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to payment of only a vote of holders part of the equity interests Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Company entitled Excise Tax (a “Reduced Payment”). For purposes of determining whether to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approvalmake a Full Payment or a Reduced Payment, the Company shall provide drafts cause to be taken into account the value of all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such waivers state and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approvallocal taxes). If any of the Waived 280G Benefits fail to be approved as contemplated abovea Reduced Payment is made, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (ix) the requisite number of votes of holders of Executive shall have no rights to any additional payments and/or benefits constituting the equity interests of Transaction Payment, and (y) reduction in payments and/or benefits shall occur in the Company was obtained with respect to the Waived 280G Benefits manner (the “280G ApprovalReduction Method”) that results in the greatest economic benefit to the Executive as determined in this paragraph. If more than one method of reduction will result in the same economic benefit, the portions of the Transaction Payment shall be reduced pro rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or (ii) the 280G Approval was Pro Rata Reduction Method would result in any portion of the Transaction Payment being subject to taxes pursuant to Section 409A that would not obtainedotherwise be subject to taxes pursuant to Section 409A, andthen the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a resultfirst priority, no Waived 280G Benefits shall the modification will preserve to the greatest extent possible, the greatest economic benefit for the Executive as determined on an after-tax basis; (B) as a second priority, any amounts of the Transaction Payment that are contingent on future events (e.g., being terminated without Cause), will be made reduced (or provided.eliminated) before any amounts of the Transaction Payment that are not contingent on future events; and (C) as a third priority, any amounts of the Transaction Payment that are “deferred compensation” within the meaning of Section 409A will be reduced (or eliminated) before any amounts of the Transaction Payment that are not deferred compensation within the meaning of Section 409A.
Appears in 1 contract
Section 280G. To In the extent event that any “disqualified individual” with respect to the Company or any of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected otherwise payable to Executive (1) constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Internal Revenue Code and of 1986, as amended (the regulations thereunder“Code”), and (2) but for this Section 6, would be subject to the excise tax imposed by Section 4999 of the Code, then such payments and benefits will be either (x) delivered in full, or (y) delivered as to such lesser extent that would result in no portion of such payments and benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999 of the Code (and any equivalent state or local excise taxes), results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such payments and benefits may be taxable under Section 4999 of the Code. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 6 will be made in writing by a nationally-recognized accounting firm mutually agreed to by the Company and Executive (the Accountants”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 6, the Accountants (i) may make reasonable assumptions and approximations concerning applicable taxes, (ii) no later than two may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, and (2iii) Business Days prior shall take into account a “reasonable compensation” (within the meaning of Q&A-9 and Q&A-40 to Q&A 44 of the final regulations under Section 280G of the Code) analysis of the value of services provided or to be provided by Executive, including any agreement by Executive to refrain from performing services pursuant to a covenant not to compete or similar covenant applicable to Executive that may then be in effect (including, without limitation, those contemplated by Section 5 of the Agreement). The Company and Executive agree to furnish to the Closing DateAccountants such information and documents as the Accountants may reasonably request in order to make a determination under this provision. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this provision. To the extent such aggregate parachute payment amounts are required to be so reduced, the parachute payment amounts due to Executive (but no non-parachute payment amounts) shall be reduced in the following order: (i) the parachute payments that are payable in cash shall be reduced (if necessary, to zero) with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity, valued at full value (rather than accelerated value) (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) shall be reduced in each case in reverse order beginning with payments or benefits which are to each individual who agrees to be paid the waiver furthest in time; and (iii) all other non-cash benefits not otherwise described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(iiii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided6 reduced last.
Appears in 1 contract
Section 280G. To In the extent event it shall be determined that any “disqualified individual” with respect to payment or distribution by the Company or any of its Affiliates affiliates to or for the benefit of Executive (within whether paid or payable or distributed or distributable pursuant to the meaning terms of this Arrangement or otherwise) (the “Total Payments”), is or will be subject to the excise tax (the “Excise Tax”) imposed by Section 280G(c4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then the Total Payments shall be reduced to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the net after-tax benefit to Executive after reducing Executive’s Total Payments to the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax) benefit to Executive without such reduction. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payment made pursuant to Section 4(a)(i) of this Arrangement, then to the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected payment made pursuant to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A4(a)(ii) of this Arrangement, then to the Code payment made pursuant to Section 4(a)(iii) of this Arrangement, and then to any other payment that triggers such Excise Tax in the regulations thereunder, then, the Company will following order: (i) no later than four reduction of cash payments, (4ii) Business Days prior cancellation of accelerated vesting of performance-based equity awards (based on the reverse order of the date of grant), (iii) cancellation of accelerated vesting of other equity awards (based on the reverse order of the date of grant), and (iv) reduction of any other payments due to the Closing DateExecutive (with benefits or payments in any group having different payment terms being reduced on a pro-rata basis). All mathematical determinations, use reasonable best efforts and all determinations as to obtain from each such “disqualified individual” a waiver whether any of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be Total Payments are “parachute payments” (within the meaning of Section 280G of the Code Code), that are required to be made under this paragraph, including determinations as to whether the Total Payments to Executive shall be reduced to the Safe Harbor Cap and the regulations thereunder)assumptions to be utilized in arriving at such determinations, and (ii) no later than two (2) Business Days prior shall be made at the Company’s expense by a nationally recognized accounting firm mutually acceptable to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits Executive (the “280G ApprovalAccounting Firm”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits shall be made or provided).
Appears in 1 contract
Samples: Severance Agreement (Global Power Equipment Group Inc.)
Section 280G. To Following the extent that any “disqualified individual” with respect to the Company or any date of its Affiliates (within the meaning of Section 280G(c) of the Code and the regulations thereunder) would receive any payments or benefits that would reasonably be expected to constitute “parachute payments” (within the meaning of Section 280G(b)(2)(A) of the Code and the regulations thereunder, thenthis Agreement, the Company will Parties and their respective counsel shall work in good faith to determine (i) no later than four (4) whether the consummation of the Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such Combination will constitute a “disqualified individualchange in ownership or control” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining payments and/or benefits shall not be deemed to be “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder)of either Corix or SWWC, and (ii) no whether and to what extent any payments or benefits that are required or proposed to be made to any SWWC Personnel or Corix Water Personnel, as applicable, in connection with the consummation of the Business Combination could reasonably be expected to constitute “parachute payments” under Section 280G(b)(2) of the Code (any such payments and benefits, the “Section 280G Payments”, and any such individuals, the “Disqualified Individuals”). Corix or SWWC, as applicable depending on the results of the immediately preceding sentence (the “280G Entity”), shall seek to obtain a waiver from each Disqualified Individual (a “Parachute Payment Waiver”) waiving any such Disqualified Individual’s right to receive some or all of such Section 280G Payments (the “Waived Benefits”), to the extent necessary so that all remaining payments and benefits applicable to such Disqualified Individual shall not be deemed a parachute payment. No later than two ten (210) Business Days prior to the Closing Date, with respect to the 280G Entity shall submit the Waived Benefits, if any, of each individual Disqualified Individual who agrees to the waiver described in clause (i), submit to executed a vote of holders Parachute Payment Waiver for approval of the equity interests applicable equityholders of the Company 280G Entity entitled to vote on such matters (along with adequate disclosure matter and such Disqualified Individual’s right to receive the Waived Benefits shall be conditioned upon receipt of the requisite approval by the equityholders of the 280G Entity entitled to vote on such matter in a manner that is intended to satisfy the requirements of comply with Section 280G(b)(5)(B)(ii280G(b)(5)(B) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G BenefitsTreasury Regulations. Prior to soliciting such waivers obtaining the Parachute Payment Waivers and approvalseeking the equityholder approval described in this Section 7.13, the Company 280G Entity shall provide drafts the other Party and its counsel with copies of such waivers the 280G Entity’s analysis under Section 280G of the Code, true, correct and complete copies of the duly executed Parachute Payment Waivers, and the disclosure statement and approval equityholder solicitation materials to Parent for its review contemplated by this Section 7.13 and approval provide at least five (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (45) Business Days prior to soliciting such waivers review the same, and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, prior to the Closing Date, the Company shall deliver to Parent evidence reasonably acceptable to Parent that a vote of holders of the equity interests of the Company was solicited in accordance with the foregoing provisions of this Section 7.11 and that either (i) the requisite number of votes of holders of the equity interests of the Company was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and, as a result, no Waived 280G Benefits Entity shall be made consider in good faith incorporating any changes reasonably requested by the other Party or providedtheir counsel.
Appears in 1 contract
Samples: Transaction Agreement
Section 280G. To No later than two (2) Business Days prior to the extent Closing, the Company shall (a) make reasonable efforts to obtain from each Person, if any, who could receive or retain any payments and/or benefits that may be subject to an excise tax under Section 4999 of the Code or non-deductible under Section 280G of the Code in connection with the consummation of the transactions contemplated by this Agreement (without regard to Treasury Regulations Section 1.280G-1, Q&A 9), whether alone or together with any other event (a “disqualified individual” 280G Benefit”) (which determination shall be made by the Company and shall be subject to review and approval by Buyer, such approval not to be unreasonably withheld, conditioned or delayed), a duly executed waiver with respect to any payments and/or benefits, if any, that may separately or in the Company or any of its Affiliates (aggregate constitute “parachute payments” within the meaning of Section 280G(c280G(b)(2) of the Code and the regulations promulgated thereunder) would receive any payments or benefits (each a “280G Waiver”), and (b) to then submit to the stockholders of the Company, for approval in a manner reasonably satisfactory to the Buyer that would reasonably be expected to constitute “parachute payments” (within the meaning of complies with Section 280G(b)(2)(A280G(b)(5)(B) of the Code and the regulations thereunder, then, the Company will (i) no later than four (4) Business Days prior to the Closing Date, use reasonable best efforts to obtain from each such “disqualified individual” a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that any remaining , such that, if approved by the stockholders of the Company, such payments and/or and benefits shall not be deemed to be “parachute payments” (within the meaning of under Section 280G 280G(b)(2) of the Code and the regulations thereunder), and and, if applicable, no less than one (ii) no later than two (21) Business Days prior to the Closing Date, with respect to each individual who agrees to the waiver described in clause (i), submit to a vote of holders of the equity interests of the Company entitled to vote on such matters (along with adequate disclosure intended to satisfy the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder) the right of any such “disqualified individual” to receive the Waived 280G Benefits. Prior to soliciting such waivers and approval, the Company shall provide drafts of such waivers and disclosure and approval materials to Parent for its review and approval (which approval will not be unreasonably withheld, conditioned or delayed) no later than four (4) Business Days prior to soliciting such waivers and soliciting such approval. If any of the Waived 280G Benefits fail to be approved as contemplated above, such Waived 280G Benefits shall not be made or provided. To the extent applicable, Day prior to the Closing Date, the Company shall deliver to Parent Buyer evidence reasonably acceptable satisfactory to Parent Buyer (i) that a vote of holders approval of the equity interests of stockholders the Company Company, was solicited in accordance with Section 280G and the foregoing provisions of this Section 7.11 and that either (i) regulations promulgated thereunder, and, if applicable, the requisite number of votes of holders of the equity interests of the Company stockholder approval was obtained with respect to any payments and/or benefits that were subject to the Waived 280G Benefits stockholder approval (the “280G Approval”) ), or (ii) that the 280G Approval was not obtained, and, obtained and as a result, no Waived 280G Benefits consequence that such “parachute payments” shall not be made or provided, pursuant to the applicable 280G Waivers which were executed by the affected individuals prior to the Closing Date. No less than two (2) Business Days prior to the date the Company, submit the 280G Benefits to the stockholders of the Company, the Company will provide to Buyer a draft of all documents and calculations of the parachute payments contemplated in this Section 6.8 and all relevant supporting documentation for its review. The Company will accept all reasonable comments that are made by Buyer or its representatives.
Appears in 1 contract
Samples: Agreement and Plan of Merger (AzurRx BioPharma, Inc.)