Common use of 280G Payments Clause in Contracts

280G Payments. (a) In the event that the severance benefits provided for in this Agreement (the “Total Payments”) constitute “Parachute Payments” within the meaning of Code Section 280G , the excess of the Parachute Payments over three times the five year average of compensation as computed under Code Section 280G (such excess is referred to as the “280G Excess”) is greater than one hundred thousand dollars ($100,000) (the “Valley”) and the Employee is subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall pay to the Employee an additional amount or amounts (the “Gross-Up Payment”) such that the net amount retained by the Employee, after deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and the Excise Tax upon the Gross-Up Payment, shall be equal to the Total Payments. If the 280G Excess is less than the Valley, the Employee may elect to either have the amount of Employee’s payments and benefits hereunder reduced to the point no Excise Tax is due or may receive all benefits hereunder and pay the Excise Tax without the benefit of any Gross-Up Payment from the Company. Unless the Company and the Employee otherwise agree in writing, any determination required under this Section 4 shall be made in writing by the Company’s independent tax advisors (the “Accountants”), whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 4, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and 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 4, including by reason of any state, federal or other government audit of such calculations. (b) The payment of severance benefits provided for in this Agreement shall be subject to all applicable income, employment and social tax rules and regulations.