Zynga 2015 Annual Report Download - page 130

payment of any severance benefits under the Plan by the amount of such indebtedness . Such offset shall be made in accordance with all applicable laws. The
Participant’s execution of the Participant Notice constitutes knowing written consent to the foregoing.
(e) Parachute Payments. Except as otherwise expressly provided in an agreement between a Participant and the Company, if any payment or benefit the
Participant would receive in connection with a Change in Control from the Company or otherwise (a “ Payment”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “ ExciseTax
”), then such Payment will be equal to the Reduced Amount. The “ ReducedAmount” will be either (A) the largest portion of the Payment that would result in no
portion of the Payment being subject to the Excise Tax, or (B) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into
account all applicable federal, state, provincial, foreign and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in the Participant’s receipt, on an after-tax basis, of the greatest economic benefit notwithstanding that all or some portion of the Payment
may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced
Amount, reduction will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of stock awards other than stock
options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits paid to the Participant. Within any such category of Payments
(that is, (1), (2), (3) or (4)), a reduction will occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the
Code and then with respect to amounts that are. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting
will be cancelled in the reverse order of the date of grant of the Participant’s applicable type of stock award ( i.e. , earliest granted stock awards are cancelled last).
If Section 409A is not applicable by law to a Participant, the Company shall determine whether any similar law in the Participant’s jurisdiction applies and should
be taken into account.
7. T AX M ATTERS .
(a) Application of Code Section 409A . It is intended that all of the benefits provided under the Plan satisfy, to the greatest extent possible, the exemptions
from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, “ Section
409A”) provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and the Plan will be construed to the greatest extent
possible as consistent with those provisions. To the extent not so exempt, the Plan (and any definitions under the Plan) will be construed in a manner that complies
with Section 409A, and incorporates by reference all required definitions and payment terms. For purposes of Section 409A (including, without limitation, for
purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), a Participant’s right to receive any installment payments under the Plan will be treated as a right to
receive a series of separate payments and, accordingly, each installment payment under the Plan will at all times be considered a separate and distinct payment. If
the Plan Administrator determines that any of the payments upon a Separation from Service provided under the Plan constitute “deferred compensation” under
Section 409A and if the
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