REQUIRED UNDER THE PROVISIONS OF SECTION 409A TO AVOID IMPOSITION OF
ADDITIONAL INCOME AND OTHER TAXES, PROVIDED THAT THE COMPANY AND EXECUTIVE AGREE
TO TAKE INTO ACCOUNT ANY TRANSITIONAL RULES AND EXEMPTION RULES AVAILABLE UNDER
SECTION 409A.
3.5
LIMITATION ON PAYMENTS.
(A)
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
TO THE CONTRARY, ANY BENEFITS PAYABLE OR TO BE PROVIDED TO EXECUTIVE BY THE
COMPANY OR ITS AFFILIATES, WHETHER PURSUANT TO THIS AGREEMENT OR OTHERWISE,
WHICH ARE TREATED AS SEVERANCE PAYMENTS SHALL BE MODIFIED OR REDUCED IN THE
MANNER PROVIDED IN (B) BELOW TO THE EXTENT NECESSARY SO THAT THE BENEFITS
PAYABLE OR TO BE PROVIDED TO EXECUTIVE UNDER THIS AGREEMENT THAT ARE TREATED AS
SEVERANCE PAYMENTS, AS WELL AS ANY PAYMENTS OR BENEFITS PROVIDED OUTSIDE OF THIS
AGREEMENT THAT ARE SO TREATED, SHALL NOT CAUSE THE COMPANY TO HAVE PAID AN
EXCESS SEVERANCE PAYMENT.
IN COMPUTING SUCH AMOUNT, THE PARTIES SHALL TAKE INTO
ACCOUNT ALL PROVISIONS OF CODE SECTION 280G, AND THE REGULATIONS THEREUNDER,
INCLUDING MAKING APPROPRIATE ADJUSTMENTS TO SUCH CALCULATION FOR AMOUNTS
ESTABLISHED TO BE
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REASONABLE COMPENSATION.
IF EXECUTIVE BECOMES ENTITLED TO COMPENSATION AND
BENEFITS UNDER SECTION 3.1 AND SUCH PAYMENTS ARE CONSIDERED TO BE SEVERANCE
PAYMENTS CONTINGENT UPON A CHANGE IN CONTROL, EXECUTIVE SHALL BE REQUIRED TO
MITIGATE DAMAGES (BUT ONLY WITH RESPECT TO AMOUNTS THAT WOULD BE TREATED AS
SEVERANCE PAYMENTS) BY REDUCING THE AMOUNT OF SEVERANCE PAYMENTS HE IS ENTITLED
TO RECEIVE BY ANY COMPENSATION AND BENEFITS HE EARNS FROM SUBSEQUENT EMPLOYMENT
(BUT SHALL NOT BE REQUIRED TO SEEK SUCH EMPLOYMENT) DURING THE 12-MONTH PERIOD
AFTER TERMINATION (OR SUCH LESSER PERIOD AS HE IS ENTITLED TO EXTENDED
BENEFITS).
(B)
IN THE EVENT THAT THE AMOUNT OF ANY
SEVERANCE PAYMENTS WHICH WOULD BE PAYABLE TO OR FOR THE BENEFIT OF EXECUTIVE
UNDER THIS AGREEMENT MUST BE MODIFIED OR REDUCED TO COMPLY WITH THIS
SECTION 3.5, EXECUTIVE SHALL DIRECT WHICH SEVERANCE PAYMENTS ARE TO BE MODIFIED
OR REDUCED; PROVIDED, HOWEVER, THAT NO INCREASE IN THE AMOUNT OF ANY PAYMENT OR
CHANGE IN THE TIMING OF THE PAYMENT SHALL BE MADE WITHOUT THE CONSENT OF THE
COMPANY.
(C)
THIS SECTION 3.5 SHALL BE INTERPRETED SO AS
TO AVOID THE IMPOSITION OF EXCISE TAXES ON EXECUTIVE UNDER SECTION 4999 OF THE
CODE OR THE DISALLOWANCE OF A DEDUCTION TO THE COMPANY PURSUANT TO
SECTION 280G(A) OF THE CODE WITH RESPECT TO AMOUNTS PAYABLE UNDER THIS AGREEMENT
OR OTHERWISE.
NOTWITHSTANDING THE FOREGOING, IN NO EVENT WILL ANY OF THE
PROVISIONS OF THIS SECTION 3.1 CREATE, WITHOUT THE CONSENT OF EXECUTIVE, AN
OBLIGATION ON THE PART OF EXECUTIVE TO REFUND ANY AMOUNT TO THE COMPANY
FOLLOWING PAYMENT OF SUCH AMOUNT.
(D)
IN ADDITION TO THE LIMITS OTHERWISE PROVIDED
IN THIS SECTION 3.5, TO THE EXTENT PERMITTED BY LAW, EXECUTIVE MAY IN HIS SOLE
DISCRETION ELECT TO REDUCE ANY PAYMENTS HE MAY BE ELIGIBLE TO RECEIVE UNDER THIS
AGREEMENT TO PREVENT THE IMPOSITION OF EXCISE TAXES ON EXECUTIVE UNDER
SECTION 4999 OF THE CODE.
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4.
CONFIDENTIALITY AND NONCOMPETITION.
(A)
IN CONSIDERATION