Common use of 280G Cutback Clause in Contracts

280G Cutback. Notwithstanding any other provisions of this Agreement to the contrary, in the event that the Company determines in good faith that any payment or benefit received or to be received by Executive pursuant to this Agreement, or otherwise (all such payments and benefits, including, without limitation, salary and bonus payments, being hereinafter called the “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), by reason of being considered “contingent on a change in ownership or control” of the Company within the meaning of Section 280G of the Code, then such Total Payments shall be reduced to the extent necessary so that the Total Payments will be less than three times Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code), unless the amount of such reduction would equal or exceed one-hundred percent (100%) of the excise taxes that would be imposed by Section 4999 of the Code on such payments and benefits. The reduction of the Total Payments shall apply as follows, unless otherwise agreed and such agreement is in compliance with Section 409A of the Code: (i) first, any cash severance payments due under the Agreement shall be reduced, with the last such payment due first forfeited and reduced, and sequentially thereafter working from the next last payment, and (ii) second, any acceleration of vesting of any equity shall be deferred with the tranche that would vest last (without any such acceleration) first deferred. Notwithstanding the foregoing, to the extent satisfaction of the shareholder approval requirements of Section 280G(b)(5)(B) and Treasury Regulation Section 1.280G-1 Q&A7 (the “Shareholder Approval Exception”) would result in the Total Payments being excluded from tax imposed by Section 4999 of the Code, the Company hereby agrees that it will seek the necessary approval from the stockholders of the Company and take the other steps reasonably necessary, and within its control, to satisfy the requirements of the Shareholder Approval Exception.

280G Cutback. Notwithstanding any other provisions provision of this Agreement to the contrary, if payments made or benefits provided pursuant to Section 6 herein are considered “parachute payments” under Code Section 280G, then such parachute payments plus any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reduction, the net after tax benefit to Executive shall exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a “parachute payment” within the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the event that Code at the time of termination of Executive’s employment), less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required to be reduced in accordance with this Section 10(i) shall be made at the Company’s expense by a nationally recognized certified public accounting firm as may be designated by the Company determines and reasonably acceptable to Executive prior to a Change in good faith that Control (the “Accounting Firm”). In the event of any payment mistaken underpayment or benefit received overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to be received by Executive pursuant or refunded to this Agreementthe Company, or otherwise as the case may be, but only to the extent any such refund would result in (all i) no portion of such payments and benefits, including, without limitation, salary and bonus payments, being hereinafter called the “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), by reason of being considered “contingent on a change in ownership or control” of the Company within the meaning of Section 280G of the Code, then such Total Payments shall be reduced to the extent necessary so that the Total Payments will be less than three times Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code), unless the amount of such reduction would equal or exceed one-hundred percent (100%) of the excise taxes that would be imposed by Section 4999 of the Code on such payments and benefits. The reduction of the Total Payments shall apply as follows, unless otherwise agreed and such agreement is in compliance with Section 409A of the Code: (i) first, any cash severance payments due under the Agreement shall be reduced, with the last such payment due first forfeited and reduced, and sequentially thereafter working from the next last payment, and (ii) seconda dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, with interest at the applicable Federal rate provided for in Code Section 7872(f)(2). Any reduction in payments required by this Section 10(i) shall occur in the following order: (1) any cash severance, (2) any other cash amount payable to Executive, (3) any benefit valued as a “parachute payment,” and (4) the acceleration of vesting of any equity shall be deferred with the tranche that would vest last (without any such acceleration) first deferred. Notwithstanding the foregoing, to the extent satisfaction of the shareholder approval requirements of Section 280G(b)(5)(B) and Treasury Regulation Section 1.280G-1 Q&A7 (the “Shareholder Approval Exception”) would result in the Total Payments being excluded from tax imposed by Section 4999 of the Code, the Company hereby agrees that it will seek the necessary approval from the stockholders of the Company and take the other steps reasonably necessary, and within its control, to satisfy the requirements of the Shareholder Approval Exceptionequity-based awards.

280G Cutback. Notwithstanding any other provisions provision of this Agreement to the contrary, if payments made or benefits provided pursuant to Section 6 herein are considered “parachute payments” under Code Section 280G, then such parachute payments plus any other payments made or benefits provided by the Company to Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reduction, the net after tax benefit to Executive shall exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under Section 6, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a “parachute payment” within the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the event that Code at the time of termination of Executive’s employment), less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required to be reduced in accordance with this Section 10(i) shall be made at the Company’s expense by a nationally recognized certified public accounting firm as may be designated by the Company determines and reasonably acceptable to Executive prior to a Change in good faith that Control (the “Accounting Firm”). In the event of any payment mistaken underpayment or benefit received overpayment under this Section 10(i), as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to be received by Executive pursuant or refunded to this Agreementthe Company, or otherwise as the case may be, but only to the extent any such refund would result in (all i) no portion of such payments and benefits, including, without limitation, salary and bonus payments, being hereinafter called the “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code and (ii) a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of 1986federal, as amended (state and local income and employment taxes, with interest at the “Code”applicable Federal rate provided for in Code Section 7872(f)(2). Any reduction in payments required by this Section 10(i) shall, by reason of being considered “contingent on a change in ownership or control” of the Company within the meaning of Section 280G of the Code, then such Total Payments shall be reduced to the extent necessary so that possible, be made in a manner does not violate the Total Payments will be less than three times Executive’s “base amount” (as defined in Section 280G(b)(3) provisions of the Code), unless the amount of such reduction would equal or exceed one-hundred percent (100%) of the excise taxes that would be imposed by Section 4999 of the Code on such payments and benefits. The reduction of the Total Payments shall apply as follows, unless otherwise agreed and such agreement is in compliance with Section 409A of the CodeCode and shall occur in the following order: (i1) first, any cash severance payments due under the Agreement shall be reducedseverance, with the last such payment due first forfeited and reduced(2) any other cash amount payable to Executive, and sequentially thereafter working from the next last (3) any benefit valued as a “parachute payment, ,” and (ii4) second, any the acceleration of vesting of any equity shall be deferred with the tranche that would vest last (without any such acceleration) first deferred. Notwithstanding the foregoing, to the extent satisfaction of the shareholder approval requirements of Section 280G(b)(5)(B) and Treasury Regulation Section 1.280G-1 Q&A7 (the “Shareholder Approval Exception”) would result in the Total Payments being excluded from tax imposed by Section 4999 of the Code, the Company hereby agrees that it will seek the necessary approval from the stockholders of the Company and take the other steps reasonably necessary, and within its control, to satisfy the requirements of the Shareholder Approval Exceptionequity-based awards.

280G Cutback. Notwithstanding any other provisions of (a) Anything in this Agreement to the contrarycontrary notwithstanding, in the event that the Company determines in good faith that amount of any compensation, payment or benefit received distribution by the Company to or to be received by Executive for your benefit, whether paid or payable or distributed or distributable pursuant to the terms of this AgreementAgreement or otherwise, or otherwise (all such payments and benefits, including, without limitation, salary and bonus payments, being hereinafter called the “Total Payments”) would be subject to the excise tax imposed by calculated in a manner consistent with Section 4999 280G of the Internal Revenue Code of 1986, as amended (the “Code”), by reason of being considered “contingent on a change in ownership or control” of and the Company within the meaning of Section 280G of the Code, then such Total Payments shall be reduced to the extent necessary so that the Total Payments will be less than three times Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code), unless the amount of such reduction would equal or exceed one-hundred percent (100%) of the excise taxes that would be imposed by Section 4999 of the Code on such payments and benefits. The reduction of the Total Payments shall apply as follows, unless otherwise agreed and such agreement is in compliance with Section 409A of the Code: (i) first, any cash severance payments due under the Agreement shall be reduced, with the last such payment due first forfeited and reduced, and sequentially thereafter working from the next last payment, and (ii) second, any acceleration of vesting of any equity shall be deferred with the tranche that would vest last (without any such acceleration) first deferred. Notwithstanding the foregoing, to the extent satisfaction of the shareholder approval requirements of Section 280G(b)(5)(B) and Treasury Regulation Section 1.280G-1 Q&A7 applicable regulations thereunder (the “Shareholder Approval ExceptionAggregate Payments”) ), would result in be subject to the Total Payments being excluded from excise tax imposed by Section 4999 of the Code, then the Company hereby agrees Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which you become subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it will seek would result in you receiving a higher After Tax Amount (as defined below) than you would receive if the necessary approval Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the stockholders transaction that is subject to Section 280G of the Code: (i) cash payments not subject to Section 409A of the Code; (ii) cash payments subject to Section 409A of the Code; (iii) equity-based payments and acceleration; and (iv) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments 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). (b) For purposes of this Section 8, the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on you as a result of your receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, you shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. (c) The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 8(a) shall be made by Golden Parachute Tax Solutions, LLC (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and take you at such time as is reasonably requested by the other steps reasonably necessary, Company or you. Any determination by the Accounting Firm shall be binding upon the Company and within its control, to satisfy the requirements of the Shareholder Approval Exceptionyou.