Section 409a Clause Example from Business Contracts

Section 409a. 8.1 Notwithstanding anything to the contrary in the Plan, no severance payments or benefits to be paid or provided to an Eligible Employee, if any, under the Plan that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Code, and the final regulations and any guidance promulgated thereunder ("Section 409A") (together, the "Deferred Payments") will be paid or provided until the Eligible Employee has a "...separation from service" within the meaning of Section 409A. 8.2 It is intended that none of the severance payments or benefits under the Plan will constitute Deferred Payments but rather will be exempt from Section 409A as a payment that would fall within the "short-term deferral period" as described in Section 8.4 below or resulting from an involuntary separation from service as described in Section 8.5 below. 8.4 Any amount paid under the Plan that satisfies the requirements of the "short-term deferral" rule set forth in Treasury Regulation Section 1.409A-1(b)(4) will not constitute Deferred Payments for purposes of Section 8.1 above. 8.5 Any amount paid under the Plan that qualifies as a payment made as a result of an involuntary separation from service pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii) that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of Section 8.1 above. 8.6 The foregoing provisions are intended to comply with or be exempt from the requirements of Section 409A so that none of the payments and benefits to be provided under the Plan will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply or be exempt. View More