Excess Parachute Payment Clause Samples
The Excess Parachute Payment clause defines how payments to an employee that exceed certain limits, typically in connection with a change of control or termination, are handled under the agreement. It generally applies to situations where severance or other compensation could trigger tax penalties under IRS rules for "parachute payments," such as those exceeding three times the employee's base compensation. This clause is designed to address and mitigate the risk of adverse tax consequences for both the employer and employee by outlining how excess amounts will be reduced or managed, ensuring compliance and avoiding unnecessary financial penalties.
Excess Parachute Payment. Notwithstanding any provision of this Agreement to the contrary, the Company shall not pay any benefit under this Agreement to the extent the benefit would create an excise tax under the excess parachute rules of Section 280G of the Code.
Excess Parachute Payment i. Anything in this Agreement to the contrary notwithstanding, to the extent that any Company provided payment, distribution or benefit in favor of the Executive (within the meaning of Section 280G of the Code and the regulations thereunder), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Change of Control Termination Total Payments”), is or will be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then the Change of Control Termination Total Payments shall be reduced (but not below zero) to the extent that, and only to the extent that, such reduction in the Change of Control Termination Total Payments would result in the Executive not being subject to the Excise Tax. Unless the Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing, the Company shall reduce or eliminate the Change of Control Termination Total Payments, by first reducing or eliminating the portion of the Change of Control Termination Total Payments which are payable in cash and then by reducing or eliminating non-cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the date of the Change of Control. Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive's rights and entitlements to any benefits or compensation.
ii. The determination of whether the Change of Control Termination Total Payments shall be reduced as provided in Paragraph 6(g)(i) above and the amount of such reduction (the “Section 4999 Determination”) shall be made at the Company's expense by an accounting firm selected by the Executive from among the six largest accounting firms in the United States or at the Executive’s expense by an attorney selected by the Executive. Such accounting firm or attorney shall provide its Section 4999 Determination, together with detailed supporting calculations and documentation to the Company and the Executive not later than thirty (30) days after the effective date of the Termination of Employment of Executive as a Retired Early Employee. If such firm or attorney determines that no Excise Tax is payable by the Executive with respect to the Change of Control Termination Total Payments, it shall furnish the Executive with an opinion r...
Excess Parachute Payment. In the event that any acceleration of vesting pursuant to this Agreement and any other payment or benefit received or to be received by the Participant would subject the Participant to any excise tax pursuant to Section 4999 of the Code due to the characterization of such acceleration of vesting, payment or benefit as an excess parachute payment under Section 280G of the Code, the Participant may elect, in his or her sole discretion, to reduce the amount of any acceleration of vesting called for under this Agreement in order to avoid such characterization.
Excess Parachute Payment. If all or any portion of the amounts payable to the Executive under this Agreement, either alone or together with other payments which the Executive has the right to receive from the Bank, constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), that are subject to the excise tax imposed by Section 4999 of the Code (or similar tax and/or assessment), the Bank shall be responsible for the payment of such excise tax such that the Executive is in the same after-tax position as if there were no excise tax (a “gross-up”), and the Bank (and its successor) shall be responsible for any loss of deductibility related thereto. The determination of the amount of any such excise taxes shall be made by the independent accounting firm employed by the Bank immediately prior to the Change in Control. If at a later date it is determined (pursuant to final regulations or published rulings of the IRS, final judgment of a court of competent jurisdiction or otherwise) the amount of excise taxes payable by the Executive is greater than the amount initially determined, then the Bank (or its successor) shall pay the Executive an amount equal to the sum of such additional excise taxes, any interest, fines and penalties resulting from such underpayment, plus an amount necessary to substantially reimburse the Executive for any income, excise or other taxes payable by the Executive with respect to such amounts. The “gross-up” payment described in this Section 2.5.3 shall expire on December 31, 2017, following which the Executive shall have sole responsibility for any excise tax, income tax, and any other penalty or tax associated with a payment made under this Agreement. FIRST NATIONAL BANK OF NORTHERN CALIFORNIA AMENDED AND RESTATED EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT
Excess Parachute Payment. To the extent the benefit would be an excess parachute payment under Section 280G of the Code.
Excess Parachute Payment. To the extent the benefit would create an excise tax under the excess parachute rules of Section 280G of the Code.
Excess Parachute Payment. If Executive incurs the tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code") on "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code, the Company will pay to Executive an amount (the "Gross Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the excess parachute payment and any federal, state and local income taxes and employment taxes (together with penalties and interest) and Excise Tax upon the payment provided for by this Subparagraph 8(c)(i), will be equal to the Severance Amount.
Excess Parachute Payment. Notwithstanding anything to the contrary in this Agreement, if there are payments to the Executive which constitute “excess parachute payments,” as defined in Section 280G of the Code, then the payments made to the Executive shall be the greater of: (a) one dollar ($1.00) less than the amount which would cause the payments to the Executive (including payments to the Executive which are not included in this Agreement) to be subject to the excise tax imposed by Section 4999 of the Code; and (b) the amount of payments payable to the Executive contingent upon the Company’s Change in Control (including payments to the Executive which are not included in this Agreement) if the sum of these payments, after taking into account any excise taxes that may be imposed on the Executive under Section 4999 of the Code, would be greater than the amount specified in Section 2.2(a). Any reduction to any payment made pursuant to this Section 2.2 shall be performed consistent with the requirements of Section 409A of the Code.
Excess Parachute Payment. Notwithstanding anything in this Agreement to the contrary, in the event that the benefit payable to Executive pursuant to this Agreement should cause a “parachute payment”, as defined in Code Section 280G(b)(2) of the Code, then such benefit shall be reduced One Dollar ($1.00) at a time until the payment will not constitute a parachute payment. In the event the benefit Executive receives under this Agreement should be incorrectly calculated so that such amount constitutes a parachute payment, then Executive will promptly refund to Company the excess amount. Excess amount shall mean the amount in excess of Executive’s base amount, as defined in Code Section 280G(b)(3), multiplied by 2.999.
Excess Parachute Payment. (a) Anything in this Agreement or the Plan to the contrary notwithstanding, to the extent that any payment, distribution or acceleration of vesting to or for the benefit of Executive by the Company (within the meaning of Section 280G of the Code and the regulations thereunder), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then the Total Payments shall be reduced (but not below zero) to the Safe Harbor Amount (as defined below) if and to the extent that a reduction in the Total Payments would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state and local income and employment taxes and the Excise Tax), than if Executive received the entire amount of such Total Payments in accordance with their existing terms (taking into account federal, state, and local income and employment taxes and the Excise Tax). For purposes of this Agreement, the term “Safe Harbor Amount” means the largest portion of the Total Payments that would result in no portion of the Total Payments being subject to the Excise Tax. To effectuate the foregoing, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating the portion of the Total Payments which are payable in cash and then by reducing or eliminating non-cash payments, in each case, starting with the payments to be made farthest in time from the Determination (as defined below).