Common use of Effect of Code Section 409A Clause in Contracts

Effect of Code Section 409A. (a) Notwithstanding anything contained in this Agreement to the contrary, this Agreement shall be construed in a manner consistent with Section 409A of the Internal Revenue Code and the parties shall take such actions as are required to comply in good faith with the provisions of Section 409A of the Code such that payments shall not be made to the Executive as such time if such payments shall subject the Executive to the penalty tax under Code Section 409A, but rather such payments shall be made by the Bank to the Executive at the earliest time permissible thereafter without the Executive having liability for such penalty tax under Section Code 409A. (b) Notwithstanding anything in this Agreement to the contrary, if the Bank in good faith determines, as of the effective date of Executive’s Termination of Employment that the Executive is a “specified employee” within the meaning of Section 409-A of the Code and if the payment does not qualify as a short-term deferral under Code Section 409A and Treas. Reg. 1.409A-b(b)(4) (or any similar or successor provisions), and that an amount (or any portion of an amount) payable to Executive hereunder, is required to be suspended or delayed for six months in order to satisfy the requirements of Section 409A of the Code, then the Bank will so advise Executive, and any such payment (or the minimum amount thereof) shall be suspended and accrued for six month (“Six-Month Delay”), whereupon such amount or portion thereof shall be paid to Executive in a lump sum on the first day of the seventh month following the effective date of Executive’s Termination of Employment.