Guarantee of Benefits in Excess of 280G Limits

[Guest Edward McElroy]

Employee has an agreement with Company A to receive 1,000,000 (not to exceed 280G limits). Employee has second agreement with Corporation B, a shareholder of Corporation A to pay the difference between 1,000,000 and amount paid by Corporation A. Is agreement with B a golden parachute? Please note not sure Corporation B is a payor under 1.280G-1, Q&A-10. Any thoughts? Thanks. Ed

[Guest Harry O]

I would think there is a significant risk that Company B's payment would be taken into account under Q&A 10. Company B is paying compensation to an employee of a related corporation. This payment by B could be treated as a capital contribution to Company A followed by a payment from Company A to the employee and thus an "indirect" payment by the corporation with respect to which the change in control has occurred - Company A. Cf. Reg. 1.83-6(d).