Section 409a Clause Example from Business Contracts

Section 409a. 21.1 This Agreement is intended to comply with Section 409A of the Code and the regulations issued thereunder ("Section 409A") or an exemption thereunder and shall be construed and interpreted in a manner consistent with the requirements for avoiding additional taxes or penalties under Section 409A. 21.2 If and to the extent any portion of any payment provided to the Participant under this Agreement in connection with the Participant's separation from service (as defined in Section 409A) is dete...rmined to constitute "nonqualified deferred compensation" within the meaning of Section 409A and the Participant is a "specified employee" as defined in Section 409A(a)(2)(B)(i), as determined by the Company in accordance with the procedures separately adopted by the Company for this purpose, by which determination the Participant, as a condition to accepting benefits under this Agreement and the Plan, agrees that he or she is bound, such portion of the shares of the Company's common stock to be delivered on a vesting date or the cash equivalent shall not be delivered or paid before the earlier of (i) the day that is six months plus one day after the date of separation from service (as determined under Section 409A) or (ii) the tenth 10th day after the date of the Participant's death (as applicable, the "New Payment Date"). The cash equivalent of the shares that otherwise would have been delivered to the Participant during the period between the date of separation from service and the New Payment Date or the shares themselves shall be paid or delivered to the Participant on such New Payment Date, and any remaining shares or the cash equivalent will be delivered on their original schedule. Neither the Company nor the Participant shall have the right to accelerate or defer the delivery of any such shares or cash payment except to the extent specifically permitted or required by Section 409A. This Agreement is intended to comply with the provisions of Section 409A and this Agreement and the Plan shall, to the extent practicable, be construed in accordance therewith. Terms defined in this Agreement and the Plan shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. 21.3 Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A. 5 22. No Impact on Other Benefits. The value of the Participant's Performance Units is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit. View More