Common use of Modified Cutback Clause in Contracts

Modified Cutback. Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company to or on behalf of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Severance Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code” and such excise tax, together with any interest or penalties incurred by Employee with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (a) If the Severance Payments, reduced by the sum of (i) the Excise Tax and (ii) the total of the federal, state, and local income and employment taxes payable by Employee on the amount of the Severance Payments which is in excess of the Threshold Amount (defined below), are greater than or equal to the Threshold Amount, Employee shall be entitled to the full benefits payable under this Agreement. (b) If the Threshold Amount is less than (x) the Severance Payments, but greater than (y) the Severance Payments reduced by the sum of (i) the Excise Tax and (ii) the total of the federal, state, and local income and employment taxes on the amount of the Severance Payments which is in excess of the Threshold Amount, then the benefits payable under this Agreement shall be reduced (but not below zero) to the extent necessary so that the sum of the Severance Payments shall not exceed the Threshold Amount.

Modified Cutback. Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company to or on behalf of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Severance Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code” and such excise tax, together with any interest or penalties incurred by Employee with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (ai) If the Severance Payments, reduced by the sum of (iA) the Excise Tax and (iiB) the total of the federal, state, and local income and employment taxes payable by Employee on the amount of the Severance Payments which is in excess of the Threshold Amount (defined below), are greater than or equal to the Threshold Amount, Employee shall be entitled to the full benefits payable under this Agreement. (bii) If the Threshold Amount is less than (x) the Severance Payments, but greater than (y) the Severance Payments reduced by the sum of (iA) the Excise Tax and (iiB) the total of the federal, state, and local income and employment taxes on the amount of the Severance Payments which is in excess of the Threshold Amount, then the benefits payable under this Agreement shall be reduced (but not below zero) to the extent necessary so that the sum of the Severance Payments shall not exceed the Threshold Amount.