Common use of Limitations on Payments Clause in Contracts

Limitations on Payments. (a) Notwithstanding any provision of this Agreement to the contrary, if payments to Employee under this Agreement and/or any other payment or benefit from the Employer or any of its subsidiaries of either in connection with a Change in Control are deemed an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended (“Code”), such payments or benefits shall be reduced to the extent necessary to avoid such characterization. The initial determination of whether a reduction is required under this paragraph shall be made by Employer’s independent accountants, and, to the extent practicable, Employee shall be entitled to select the payments or property that remain payable to Employee after the application of this paragraph. Employee shall be deemed to have forfeited any right to any payment or property that is subject to reduction hereunder, without requirement of further notice. In the event that a final administrative action of the Internal Revenue Service (the “IRS”) increases the amount deemed to be an “excess parachute payment” within the meaning of Code Section 280G, the amount of such increase shall be deemed a conditional payment by Employer. Employee agrees that he shall promptly remit to Employer, but in no event later than 20 business days from receipt of notice, the amount of such conditional payment, including interest thereon, determined at the applicable federal rate. (b) The Employer and the Employee intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If and when the Employee’s employment terminates, the Employee is a specified employee, as defined in Section 409A of Code, and if any payments under this Agreement will result in additional tax or interest to Employee because of Section 409A, then despite any provision of this Agreement to the contrary Employee shall not be entitled to the payments until the earliest of: (i) the date that is at least six months after termination of the Employee’s employment for reasons other than the Employee’s death; (ii) the date of the Employee’s death; or (iii) any earlier date that does not result in additional tax or interest to the Employee under Section 409A. As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Employee in a single lump sum. If any provision of this Agreement does not satisfy the requirements of Section 409A, such provision shall, nevertheless, be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Employee to additional tax or interest under Section 409A, the Employer shall reform the provision. However, the Employer shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Employee to additional tax or interest, and the Employer shall not be required to incur any additional compensation expense as a result of the reformed provision.