Example ContractsClausesLimitation on Parachute Payments
Limitation on Parachute Payments
Limitation on Parachute Payments contract clause examples

Limitation on Parachute Payments. Notwithstanding any other provision of this Agreement, if any portion of the Severance Payment or any other payment under this Agreement, or payments to or for the benefit of the Employee under any other agreement or plan (collectively, the “Change of Control Benefits”), would constitute an “excess parachute payment,” then the Change of Control Benefits to be made to the Employee shall be reduced such that the value of the aggregate Change of Control Benefits that the Employee is entitled to receive shall be One Dollar ($1) less than the maximum amount which the Employee may receive without becoming subject to the tax imposed by Section 4999 of the Code (or any successor provision) or which the Company may pay without loss of deduction under Section 280G(a) of the Code (or any successor provision); provided that the foregoing reduction in the amount of Change of Control Benefits shall not apply if the after-tax value to the Employee of the Change of Control Benefits prior to reduction in accordance herewith is greater than the after-tax value to the Employee if the Change of Control Benefits are reduced in accordance herewith. For purposes of this Agreement, the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to them in Code [Section 280G], and such “parachute payments” shall be valued as provided therein.

Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive # constitute “parachute payments” within the meaning of Section 280G of the Code and # but for this Section 9, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits will be either:

Limitation on Payments. In the event that any payment or benefit pursuant to this Agreement or otherwise that Executive would receive in connection with a change in control or ownership of the Company (a “Transaction Payment”) would # constitute a “parachute payment” within the meaning of Section 280G of the Code, and # 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 the following:

Limitation on Payments. Anything in this Agreement to the contrary notwithstanding, in the event that the Accounting Firm (as defined below) shall determine that receipt of all Payments (as defined below) would subject Executive to tax under Section 4999 of the Code, the Accounting Firm shall determine whether some amount of Agreement Payments (as defined below) meets the definition of Reduced Amount (as defined below). If the Accounting Firm determines that there is a Reduced Amount, then the aggregate Agreement Payments shall be reduced to such Reduced Amount.

Limitation on Payments. In the event that the benefits provided for under this Policy # constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and # but for this [Section 4(b)] would be subject to the excise tax imposed by Section 4999 of the Code (or any corresponding provisions of state income tax law), then such benefits shall be either # delivered in full to the Officer, or # delivered as to such lesser extent as would result in no portion of such severance benefits being subject to excise tax under Code [Section 4999], whichever amount, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Code [Section 4999], results in the receipt by the Officer on an after-tax basis of the greater amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Code [Section 4999]. Any determination required under this [Section 5(b)] shall be made in writing by the Company’s independent accountants, whose determination shall be conclusive and binding for all purposes on the Company and the Officer. In the event that # above applies, then the Officer shall be responsible for any excise taxes imposed with respect to such benefits. In the event that # above applies, then each benefit provided hereunder shall be reduced to the extent necessary to avoid imposition of such excise taxes by paying the maximum amount with respect to each category of benefits set forth below in order: # stock options whose exercise price exceeds the fair market value of the optioned stock (“Underwater Options”) # Full Credit Payments (as defined below) that are payable in cash, # non-cash Full Credit Payments that are taxable, # non-cash Full Credit Payments that are not taxable, # Partial Credit Payments (as defined below) and # non-cash employee welfare benefits. In each case, reductions shall be made in reverse chronological order such that the payment or benefit owed on the latest date following the occurrence of the event triggering the excise tax will be the first payment or benefit to be reduced (with reductions made pro-rata in the event payments or benefits are owed at the same time). “Full Credit Payment” means a payment, distribution or benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Policy or otherwise, that if reduced in value by one dollar reduces the amount of the parachute payment (as defined in Section 280G of the Code) by one dollar, determined as if such payment, distribution or benefit had been paid or distributed on the date of the event triggering the excise tax. “Partial Credit Payment” means any payment, distribution or benefit that is not a Full Credit Payment.

Limitation on Payments. In the event that the severance or change in control-related or other payments or benefits provided for in this Agreement or otherwise payable to Executive (collectively, the “Payments”) # constitute “parachute payments” within the meaning of Section 280G of the Code, and # but for this Section 8, would be subject to the excise tax imposed by Section 4999 of the Code, then such payments or benefits will be either:

Limitation on Payments. In the event that the severance or change in control-related or other payments or benefits provided for in this Agreement or otherwise payable to Executive (collectively, the “Payments”) # constitute “parachute payments” within the meaning of Section 280G of the Code, and # but for this Section 8, would be subject to the excise tax imposed by Section 4999 of the Code, then such payments or benefits will be either:

Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (“Payment”) would # constitute a “parachute payment” within the meaning of Section 280G of the Code and # but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (as defined below). The “Reduced Amount” will be either # the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or # the entire Payment, whichever amount after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’ s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will 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 Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: # as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; # as a US-DOCS\119703462.4

Limitation on Parachute Payments. In the event that the payment and other benefits provided for in this Agreement or otherwise payable to Executive # constitute "parachute payments" within the meaning of Section 280G of the Code and # but for this Section 11 (b), would be subject to the excise tax imposed by Section 4999 of the Code, then Executive's payments and benefits will be either:

Limitation on Parachute Payments. In the event that the payment and other benefits provided for in this Agreement or otherwise payable to Executive # constitute “parachute payments” within the meaning of Section 280G of the Code and # but for this Section 11 (b), would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s payments and benefits will be either:

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