Common use of Cut-Back Clause in Contracts

Cut-Back. Payments shall be made without regard to whether the deductibility of such Payments (or any other payments) would be limited or precluded by Section 280G of the Code and without regard to whether such payments would subject the Employee to Excise Tax; provided, however, that if the Total After-Tax Payments (as defined below) would be increased by the limitation or elimination of any portion of the Payments, then the Payments will be reduced to the extent necessary to maximize the Total After-Tax Payments. In the event of any underpayment or overpayment under this Section 10 (as determined after the application of this Section 10(c)), the amount of such underpayment or overpayment will be immediately paid by the Company to Employee or refunded by Employee to the Company. For purposes of this Agreement, “Total After-Tax Payments” means the difference between (A) the sum of (i) the total of all “parachute payments” (as that term is defined in Section 280G(b)(2) of the Code) made to or for the benefit of Employee and (ii) the amount of any Gross-up Payment (whether made hereunder or otherwise), less (b) all applicable federal, state, and local payroll and other taxes and income taxes (including, without limitation, the Excise Tax described in Section 4999 of the Code) imposed on the parachute payments and Gross-Up Payment.