Parachute Payment Adjustment Sample Clauses
A Parachute Payment Adjustment clause defines how certain payments to executives or key employees are modified if they would otherwise trigger excise taxes under IRS rules for "parachute payments"—typically in the context of a change in control or merger. This clause usually requires that payments be reduced to a level just below the tax threshold, or alternatively, that the recipient receives the full amount and is responsible for any resulting taxes, depending on which option leaves the recipient better off. Its core function is to prevent unintended tax liabilities for both the company and the employee, ensuring compliance with tax regulations while maximizing the net benefit to the recipient.
Parachute Payment Adjustment. If the Company, in good faith, determines that any part or all of the amounts payable to Employee pursuant to this Agreement would be "excess parachute payments" within the meaning of Section 280G(b) of the Internal Revenue Code of 1986, as amended (the "Code"), the Company may, in its discretion, reduce the amounts so payable so that the aggregate present value of such amounts will be less than 3 times the Employee's "base amount" as defined in Section 280G(b)(3) of the Code.
Parachute Payment Adjustment. Any payment or benefit Executive is eligible to receive from the Company under this Agreement pursuant to a Change in Control shall be considered a Payment (as defined in the Option Agreement) and therefore subject to Section 9(c) of the Option Agreement.
Parachute Payment Adjustment. In the event that any amount required to be paid or distributed to ▇▇▇▇▇▇ pursuant to this Agreement shall constitute a parachute within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder (the "Code"), and the aggregate of such parachute payments and any other amounts otherwise required to be paid or distributed to ▇▇▇▇▇▇ by BB&T shall cause ▇▇▇▇▇▇ to be subject to the excise tax on excess parachute payments under Section 4999 of the Code (the "Excise Tax"), BB&T shall pay to ▇▇▇▇▇▇ an additional amount (the "Gross-Up Payment") such that the net amount ▇▇▇▇▇▇ shall receive after the payment of any Excise Tax shall equal the amount which he would have received if the Excise Tax had not been imposed. The Gross-Up Payment shall be determined by BB&T's regular independent auditors and shall equal the sum of the following:
(i) The rate of the Excise Tax multiplied by the amount of the excess parachute payments;
(ii) Any federal income tax, social security tax, unemployment tax or Excise Tax imposed upon ▇▇▇▇▇▇ as a result of the Gross-Up Payment required to be made under this paragraph (e); and
(iii) Any state income or other tax imposed upon ▇▇▇▇▇▇ as a result of the Gross-Up Payment required to be made under this paragraph (e). For purposes of determining the amount of the Gross-Up Payment, ▇▇▇▇▇▇ shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation for individuals in the calendar year in which the Excise Tax is required to be paid. In addition, ▇▇▇▇▇▇ shall be deemed to pay state income taxes at a rate determined in accordance with the following formula: ( l - (highest marginal rate of federal income taxation for individuals)) X (highest marginal rate of North Carolina income taxes for individuals in the calendar year in which the Excise Tax is required to be paid). The Gross-Up Payment shall be made on or before the date that ▇▇▇▇▇▇ is required to pay the Excise Tax; provided, that if the amount of such Payment cannot be finally determined on or before such date, BB&T shall pay to ▇▇▇▇▇▇ on such date an estimate, as determined in good faith by BB&T's regular independent auditors, of the minimum amount of such payment and shall pay the remainder of such payment (together with interest at the rate provided under Section 1274(b)(2)(B) of the Code) as soon as the amount can be determined but no later than the thirtieth day after the date ▇▇▇▇▇▇ bec...
Parachute Payment Adjustment. It is the intention of the parties that the Change in Control Severance Amount under this Agreement and the value of all other amounts and benefits provided pursuant to a Change in Control, either under this Agreement or any other plan or agreement to which the Executive is a party, shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. However, if the independent accountants acting as auditors for the Company on the date of a Change in Control (or another accounting firm designated by the parties) determine, in consultation with legal counsel acceptable to the parties, that any amount payable to the Executive by the Company under this Agreement, or any other plan or agreement under which the Executive participates or is a party, would constitute an excess parachute payment within the meaning of Section 280G of the Code and be subject to the “excise tax” imposed by Section 4999 of the Code, then the Company shall pay to the Executive the amount of such excise tax and all federal and state income or other taxes with respect to the payment of the amount of such excise tax, including all such taxes with respect to any such additional amount. Such payment shall be paid to Executive no later than the end of the Executive’s taxable year following the taxable year in which Executive remits the excise tax. If at a later date, the Internal Revenue Service assesses a deficiency against the Executive for the excise tax which is greater than that which was determined at the time such amounts were paid, the Company shall pay to the Executive the amount of such unreimbursed excise tax plus any interest, penalties and professional fees or expenses, incurred by the Executive as a result of such assessment, including all such taxes with respect to any such additional amount, all paid to Executive no later than the end of the Executive’s taxable year following the taxable year in which Executive remits the deficient excise tax. The highest marginal tax rate applicable to individuals at the time of payment of such amounts will be used for purposes of determining the federal and state income and other taxes with respect thereto. The Company shall withhold from any amounts paid under this Agreement the amount of any excise tax or other federal, state or local taxes then required to be withheld. Computations of the amount of any supplemental compensation p...
Parachute Payment Adjustment