Section 409a Clause Example from Business Contracts

Section 409a. To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Code ("Section 409A"), including any regulations, or any other formal guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service. This Agreement shall be administered and interpreted in a manner consistent with this intent. Consistent with that intent, and to the extent required under Section 409A for payments that are to be... made in connection with a termination of employment, "termination of employment" shall be limited to such a termination that constitutes a "separation from service" under Section 409A. Notwithstanding any provision of this Agreement to the contrary, if the Employee constitutes a "specified employee" (as defined in Section 409A) on the date of the Employee's separation from service and if any portion of the payments to be received by the Employee upon a termination of employment would constitute a "deferral of compensation" subject to Section 409A, then to the extent necessary to comply with Section 409A, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following Employee's termination of employment will instead be paid or made available on the earlier of (i) the first business day of the seventh month after the date of Employee's termination of employment, and (ii) the Employee's death. For purposes of application of Section 409A, to the extent applicable, each payment made under this Agreement shall be treated as a separate payment. All reimbursements and in-kind benefits provided under this Agreement that constitute "nonqualified deferred compensation" within the meaning of Code Section 409A shall be made or provided in accordance with Code Section 409A, including, without limitation, that (i) in no event shall reimbursements by the Employer under this Agreement be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred; (ii) the amount of reimbursements or in-kind benefits that the Employer is obligated to pay or provide in any given calendar year shall not affect the reimbursements or in-kind benefits that the Employer is obligated to pay or provide in any other calendar year; (iii) the Employee's right to have the Employer pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit and (iv) the reimbursements paid, or the in-kind benefits to be provided, shall be determined pursuant to the terms of the applicable benefit plan, policy or agreement and shall be limited to the Employee's lifetime and the lifetime of the Employee's eligible dependents. View More