Common use of Section 280G Approval Clause in Contracts

Section 280G Approval. To the 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 such payment or benefit would potentially constitute a “parachute payment” under Section 280G of the Code, the Company shall, prior to Closing: (a) use commercially reasonable efforts to obtain written waiver by such 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 the Waived Amounts are not subsequently approved pursuant to a stockholder vote in accordance with the requirements of Section 280G(b)(5)(B) of the Code and the Treasury Regulations thereunder, including Q-7 of Section 1.280G-1 of such Treasury Regulations (the “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 Section 280G(b)(5)(B)(ii) of the Code; and (c) hold a vote in a manner that is intended to satisfy the 280G Stockholder Approval Requirements. Prior to execution of any waivers or the delivery of any documents in connection with the solicitation of such approval, the Company will have given Purchaser and its counsel a reasonable opportunity to review and comment on final drafts of all such documents.

Section 280G Approval. To Promptly following the extent that any disqualified individual (within the meaning execution 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 such payment or benefit would potentially constitute a “parachute payment” under Section 280G of no later than two (2) Business Days prior to the CodeClosing Date, the Company shall, prior shall (to Closing: (athe extent the waivers described below are obtained) use commercially reasonable efforts to obtain written waiver solicit approval by such 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 (collectivelyits stockholders, the “Waived Amounts”) to the extent the Waived Amounts are not subsequently approved pursuant to a stockholder vote required by, and in accordance with the requirements of manner that complies with, Section 280G(b)(5)(B) of the Code and the Treasury Regulations regulations promulgated thereunder, including Q-7 of the right of any “disqualified individual” (as defined in Section 1.280G-1 of such Treasury Regulations (the “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 Section 280G(b)(5)(B)(ii280G(c) of the Code; and (c) hold a vote to receive and retain any payments or benefits to be made or deemed made by the Company that would, separately or in a manner that is intended the aggregate, in the absence of such approval by stockholders, constitute “parachute payments” pursuant to satisfy the Section 280G Stockholder Approval Requirementsof the Code as a result of the transactions contemplated by this Agreement. Prior to execution of any waivers or the delivery of any documents in connection with the solicitation of 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 have given Purchaser and its counsel be made. Within a reasonable opportunity period of time prior to review soliciting such waivers and comment on final drafts vote, the Company shall provide a draft of all such documents.waivers 57