Common use of Limitations on Benefits Clause in Contracts

Limitations on Benefits. (a) It is the intention of the Executive and of the Corporation that no payments by the Corporation to or for the benefit of the Executive under this Agreement or any other agreement or plan pursuant to which he is entitled to receive payments or benefits shall be non-deductible to the Corporation by reason of the operation of Section 280G of the Code relating to parachute payments. Accordingly, and notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of said Section 280G, any such payments exceed the amount which can be deducted by the Corporation, such payments shall be reduced to the maximum amount which can be deducted by the Corporation. To the extent that payments exceeding such maximum deductible amount have been made to or for the benefit of the Executive, such excess payments shall be refunded to the Corporation with interest thereon at the applicable Federal Rate determined under Section 1274(d) of the Code, compounded annually, or at such other rate as may be required in order that no such payments shall be non-deductible to the Corporation by reason of the operation of said Section 280G. To the extent that there is more than one method of reducing the payments to bring them within the limitations of said Section 280G, the Executive shall determine which method shall be followed, provided that if the Executive fails to make such determination within forty- five (45) days after the Corporation has sent him written notice of the need for such reduction, the Corporation may determine the method of such reduction in its sole discretion.