Section 409a Clause Example from Business Contracts

Section 409a. (a) To the extent applicable, it is intended that the payments and benefits provided under this Separation Agreement comply with the requirements of Section 409A, and this Separation Agreement shall be interpreted in a manner consistent with this intent. Solely for purposes of determining the time and form of payments due under this Separation Agreement or 11 otherwise in connection with his termination of employment with the Company, Executive shall not be deemed to have incurred a termination ...of employment unless and until he shall incur a "separation from service" within the meaning of Section 409A. (b) It is intended that each payment or installment of a payment and each benefit provided under this Separation Agreement shall be treated as a separate "payment" for purposes of Section 409A . (c) To the extent that the Company and Executive determine that any provision of this Separation Agreement could reasonably be expected to result in Executive's being subject to the payment of interest or additional tax under Section 409A, the Company and Executive agree, to the extent reasonably possible as determined in good faith, to amend this Separation Agreement, retroactively, if necessary, in order to avoid the imposition of any such interest or additional tax under Section 409A. All reimbursements and in-kind benefits provided under this Separation Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during Executive's lifetime (or during a shorter period of time specified in this Separation Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit. (d) Notwithstanding any other provision in this Separation Agreement, if as of Executive's separation from service, the Executive is a "specified employee" as determined by the Company, then to the extent any amount payable or benefit provided under this Separation Agreement that the Company reasonably determines would be nonqualified deferred compensation within the meaning of Section 409A, for which payment is triggered by Executive's separation from service, and that under the terms of this Separation Agreement would be payable prior to the six-month anniversary of the Executive's separation from service, such payment or benefit shall be delayed until the earlier to occur of (a) the six-month anniversary of such termination date or (b) the date of the Executive's death. In the case of taxable benefits that constitute deferred compensation, the Company, in lieu of a delay in payment, may require the Executive to pay the full costs of such benefits during the period described in the preceding sentence and reimburse that Executive for such costs within thirty (30) calendar days after the end of such period. (e) Nothing herein shall be construed as any guarantee by the Company of any particular tax treatment of any income or payments to Executive provided pursuant to this Separation Agreement or other agreements or arrangements contemplated by this Separation Agreement, and Executive remains solely responsible for all applicable taxes on such income and payments. 12 (f) To the extent the taxable year to Executive of any Separation Payment could be the later of any two years depending on the timing of the Executive's re-execution of this Separation Agreement, such Separation Payment shall first be provided as early as practicable in the later year (together with any amounts that would have been provided in the earlier year but for the application of this subsection (f)) to the extent such separation pay or benefit is subject to Section 409A of the Code. View More