Common use of Section 280G Approval Clause in Contracts

Section 280G Approval. Promptly following the execution of this Agreement and no later than two (2) Business Days prior to the Closing Date, the Company shall (to the extent the waivers described below are obtained) use commercially reasonable efforts to solicit approval by its stockholders, to the extent required by, and in manner that complies with, Section 280G(b)(5)(B) of the Code and the regulations promulgated thereunder, of the right of any “disqualified individual” (as defined in Section 280G(c) of the Code) to receive and retain any payments or benefits to be made or deemed made by the Company that would, separately or in the aggregate, in the absence of such approval by stockholders, constitute “parachute payments” pursuant to Section 280G of the Code as a result of the transactions contemplated by this Agreement. Prior to seeking such stockholder approval, the Company shall use commercially reasonable efforts to obtain from each “disqualified individual” (as defined under Section 280G(c) of the Code) with a right to any potential “parachute payment” (as defined under Section 280G(b)(2) of the Code) a waiver of that right (“Waived 280G Benefits”) such that unless such payment to that disqualified individual is approved by stockholders in a manner described in Section 280G(b)(5) of the Code, no such payment will be made. Within a reasonable period of time prior to soliciting such waivers and vote, the Company shall provide a draft of such waivers 57

Section 280G Approval. Promptly following To the execution extent that any disqualified individual (within the meaning of Section 280G(c) of the Code) would be entitled to any payment or benefit in connection with the transactions contemplated by this Agreement and no later than two (2) Business Days prior to such payment or benefit would potentially constitute a “parachute payment” under Section 280G of the Closing DateCode, the Company shall shall, prior to Closing: (to the extent the waivers described below are obtaineda) use commercially reasonable efforts to solicit approval obtain written waiver by its stockholderssuch disqualified individual of any portion of such parachute payment that exceeds $1 less than 3.0 times such disqualified individual’s “base amount” within the meaning of Section 280G(b)(3) of the Code (collectively, the “Waived Amounts”) to the extent required by, and the Waived Amounts are not subsequently approved pursuant to a stockholder vote in manner that complies with, accordance with the requirements of Section 280G(b)(5)(B) of the Code and the regulations promulgated Treasury Regulations thereunder, including Q-7 of Section 1.280G-1 of such Treasury Regulations (the right “280G Stockholder Approval Requirements”); provided that the Company shall not be required to make any payments or otherwise undertake any action detrimental to it in order to obtain such a waiver; (b) provide disclosure intended to satisfy the requirements of any “disqualified individual” (as defined in Section 280G(c280G(b)(5)(B)(ii) of the Code; and (c) hold a vote in a manner that is intended to receive and retain any payments or benefits to be made or deemed made by satisfy the Company that would, separately or in the aggregate, in the absence of such approval by stockholders, constitute “parachute payments” pursuant to Section 280G of the Code as a result of the transactions contemplated by this AgreementStockholder Approval Requirements. Prior to seeking execution of any waivers or the delivery of any documents in connection with the solicitation of such stockholder approval, the Company shall use commercially reasonable efforts to obtain from each “disqualified individual” (as defined under Section 280G(c) of the Code) with a right to any potential “parachute payment” (as defined under Section 280G(b)(2) of the Code) a waiver of that right (“Waived 280G Benefits”) such that unless such payment to that disqualified individual is approved by stockholders in a manner described in Section 280G(b)(5) of the Code, no such payment will be made. Within have given Purchaser and its counsel a reasonable period opportunity to review and comment on final drafts of time prior to soliciting all such waivers and vote, the Company shall provide a draft of such waivers 57documents.