Section 409 Compliance Clause Samples
Section 409 Compliance. (a) The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Employee and the Company of the applicable provision without violating the provisions of Code Section 409A. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on Employee by Code Section 409A or damages for failing to comply with Code Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”
(c) Notwithstanding any other payment schedule provided herein to the contrary, if Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then each of the following shall apply:
(i) With regard to any payment that is considered “nonqualified deferred compensation” under Code Section 409A payable on account of a “separation from service,” such payment shall be made on the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Employee, and (B) the date of Employee’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to Employee in a lump sum, and all remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein; and
(ii) To th...
Section 409 Compliance. It is intended that the Separation Benefits shall be exempt from Internal Revenue Code Section 409A (“Section 409A”) due to the “short-term deferral” exception set forth in Treasury Section 1.409A-1(b)(4), or such other exemption as may apply. Each payment or benefit payable under this Agreement is intended to constitute separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2). In the event that any of the Separation Benefits are considered nonqualified deferred compensation as defined in Section 409A and such amounts are payable during a period in which Executive is a “Specified Employee” under Section 409A and the 6-month mandatory delay applies, then, amounts that would otherwise be payable during the six-month period immediately follow the Separation Date shall be accumulated through and paid on the first day of the seventh month following the Separation Date (or if Executive dies during such period, within 30 days after Executive’s death). The normal payment or distribution schedule for any remaining payments or distributions shall resume at the end of the six-month period. To the extent a provision of the Agreement is contrary to or fails to address the requirements of Section 409A and related Treasury Regulations, the Agreement shall be construed and administered as necessary to comply with such requirements to the extent allowed under applicable Treasury Regulations until the Agreement is appropriately amended to comply with such requirements.
Section 409 Compliance. It is the intention of the Company and you that this Agreement not result in unfavorable tax consequences to you under Section 409A of the Internal Revenue Code. The Company and you agree to work together in good faith in an effort to comply with Section 409A of the Code including, if necessary, amending the Agreement, provided that neither party will be required to assume an economic burden beyond what is already required by this Agreement. Company: MANNATECH, INCORPORATED By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Title: CEO & CSO Date: March 20, 2013