Common use of Reduction in Benefits Clause in Contracts

Reduction in Benefits. If at any time, any payment or other benefit to the Employee pursuant to this Agreement (all such payments and benefits, the “Potential Parachute Payments”) is or will become subject (in whole or in part) to the excise tax imposed by Section 4999 of the Code or any similar tax payable under any United States federal, state, local, foreign or other law (“Excise Taxes”), then the Employee may, at the Employee’s sole and exclusive discretion, determine that payments under this Agreement shall be reduced, to the extent necessary so that no portion of the Potential Parachute Payments is subject to Excise Taxes. For purposes of this Section 10, whenever there is to be a reduction in a Potential Parachute Payment, such reduction shall be done first by reducing any cash payments with the last payment reduced first; next any equity or equity derivatives that are included under Section 280G of the Code at full value rather than accelerated value; next any equity or equity derivatives based on acceleration value shall be reduced with the highest value reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24); finally any other non-cash benefits will be reduced.