Section 409a Clause Example from Business Contracts

Section 409a. (a) Notwithstanding anything in this Plan to the contrary, any compensation or benefits payable under this Plan that constitutes "nonqualified deferred compensation" ("Deferred Compensation") within the meaning of Section 409A of the Code, and which is designated under this Plan as payable upon a Covered Employee's termination of employment shall be payable only upon such Covered Employee's "separation from service" with the Company within the meaning of Section 409A of the Code (a "Separation f...rom Service") and, except as provided under Section 5(b) of this Plan, any such compensation or benefits shall not be paid until the sixtieth (60th) day following the Covered Employee's Separation from Service. (b) Notwithstanding any provision herein to the contrary, if a Covered Employee is deemed by the Company at the time of such Covered Employee's Separation from Service to be a "specified employee" for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which such Covered Employee is entitled under this Plan is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of such Covered Employee's benefits shall not be provided to such Covered Employee prior to the earlier of (i) the expiration of the six-month period measured from the date of such Covered Employee's Separation from Service or (ii) the date of such Covered Employee's death. Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to such Covered Employee (or such Covered Employee's estate or beneficiaries), and any remaining payments due to such Covered Employee under this Plan shall be paid as otherwise provided herein. (c) To the extent applicable, this Plan shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the adoption of this Plan. Notwithstanding any provision of this Plan to the contrary, in the event that the Company determines that any amounts payable hereunder will be immediately taxable to a Covered Employee under Section 409A of the Code and related Department of Department of Treasury guidance, to the extent permitted under Section 409A of the Code, the Company may, to the extent permitted under Section 409A of the Code (i) cooperate in good faith to adopt such amendments to this Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that they determine necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Plan, preserve the economic benefits of this Plan and/or (ii) take such other actions as mutually determined necessary or appropriate to exempt the amounts payable hereunder from Section 409A of the Code or to comply with the requirements of Section 409A of the Code and thereby avoid the application of penalty taxes under such section. To the extent applicable, each of the exceptions to Code Section 409A's prohibition on acceleration of payments of Deferred Compensation provided under Treasury Regulation 1.409A-3(j)(4) shall be permitted under the Agreement. View More