Common use of Limitation on Parachute Payments Clause in Contracts

Limitation on Parachute Payments. The Executive’s severance payments and other benefits to be received in connection with a Change in Control under this Agreement or otherwise (commonly referred to collectively as “parachute payments”) are capped at no more than three times his average annual compensation for the previous five years to the extent necessary for him not to incur excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) and for the Company not to have its deduction limited under Section 280G of the Code. In the event that the parachute payments to be received by the Executive need to be reduced to comply with the foregoing limitation, the Company shall determine which parachute payments shall be reduced and the extent of each reduction, each in a manner that will not cause a violation of Section 409A. If it is subsequently determined that the parachute payments actually received by the Executive exceed the foregoing limitation, then the Executive shall have an obligation to pay the Company upon demand an amount equal to the excess.

Limitation on Parachute Payments. The Executive’s severance payments and other benefits to be received in connection with a Change in Control under this Agreement or otherwise (commonly referred to collectively as “parachute payments”) are capped at no more than three (3) times his average annual compensation for the previous five (5) years to the extent necessary for him not to incur excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) ), and for the Company not to have its deduction limited under Section 280G of the Code. In the event that the parachute payments to be received by the Executive need to be reduced to comply with the foregoing limitation, the Company shall determine which parachute payments shall be reduced and the extent of each reduction, each in a manner that will not cause a violation of Section 409A. 409A of the Code. If it is subsequently determined that the parachute payments actually received by the Executive exceed the foregoing limitation, then the Executive shall have an obligation to pay the Company upon demand an amount equal to the excess.