Limitation on Payments

Example Definitions of "Limitation on Payments"
Limitation on Payments. In the event that the severance and other benefits provided for in this Plan or otherwise payable to the Executive (x) constitute "parachute payments" within the meaning of Section 280G of Code and (y) but for this Section 6, would be subject to the excise tax imposed by Section 4999 of the Code, then the Executive's severance benefits and other payments under Section 4(d) shall be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of... such severance benefits and other payments being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by the Executive on an after-tax basis, of the greatest amount of severance benefits and other payments, notwithstanding that all or some portion of such severance benefits and other payments may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting "parachute payments" as defined in Section 280G of the Code, is necessary so that benefits are delivered to a lesser extent, reduction shall occur in the following manner: (i) the payments and benefits which do not constitute nonqualified deferred compensation subject to Section 409A shall be reduced first; and (ii) all other payments and benefits shall then be reduced as follows: (A) cash payments shall be reduced before non-cash payments; and (B) payments to be made on a later payment date shall be reduced before payments to be made on an earlier payment date. Reduction in either cash payments or equity compensation benefits shall be made pro-rata between and among benefits which are subject to Section 409A of the Code and benefits which are exempt from Section 409A of the Code. In the event that the accelerated vesting of equity awards is to be cancelled, such vesting acceleration shall be cancelled in the reverse chronological order of the Executive's equity awards' grant dates. Unless the Company and the Executive otherwise agree in writing, any determination required under this Section 6 shall be made in writing by the Company's independent public accountants immediately prior to the Change in Control (the "Accountants"), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of making the calculations required by this Section 6, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6. View More
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