Common use of Limits on Payments Clause in Contracts

Limits on Payments. Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any benefit, payment or distribution by the Bank to or for the benefit of Executive (whether payable or distributable pursuant to the terms of this Agreement or otherwise) would, if paid, be subject to the excise tax imposed by Section 4999 of the Code, then the aggregate present value of such payments shall be reduced (but not below zero) to an amount expressed in present value that maximizes the aggregate present value of the payments without causing the payments or any part thereof to be subject to the excise tax and therefore nondeductible by the Bank because of Section 280G of the Code (“Section 280G"). The reduction of the payments due hereunder, if applicable, shall be made by first reducing cash payments and then, to the extent necessary, reducing those payments having the next highest ratio of Parachute Value to actual present value of such payments as of the date of the change of control. For purposes of this Section 7(f), the “Parachute Value” of a payment means the present value as of the date of the change of control of the portion of such payment that constitutes a “parachute payment” under Section 280G(b)(2).