Section 409A: Separation From Service; Delay of Payments. Notwithstanding any provision to the contrary in this Agreement, no payment or benefit shall be paid pursuant to Section 7 (including subparts) that would be considered “deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or the Treasury regulations or other guidance issued thereunder (“Section 409A”) until Executive has incurred a “separation from service” (as such term is defined under Section 409A). Further, no payments contemplated by Section 7.2 of this Agreement will be paid during the six-month period following Executive’s Termination Date unless the Company determines that Executive is not a “specified employee” (as that term is defined under Section 409A), or if the Company determines that Executive is a “specified employee,” that paying such amounts would not cause the Executive to incur an additional tax under Section 409A. The six-month delay described in the preceding sentence shall not apply to the extent (a) the amount of such payment, or any portion thereof, constitutes a “short-term deferral” within the meaning of Section 409A, and (b) to the extent the amount of such payment does not constitute a “short-term deferral,” the amount of such payment, or any portion thereof, does not exceed two times the lesser of (i) the Executive’s annualized compensation based upon the Executive’s annual rate of pay for services provided to the Company for the taxable year of the Executive preceding the taxable year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely had no separation from service occurred), or (ii) the maximum amount of compensation that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Termination Date occurs. If the payment of any amount under Section 7.2 is delayed as a result of this Section, on the first regularly scheduled payroll date following the end of the six-month delay period, the Company will pay the Executive a single lump-sum amount in cash equal to the cumulative amounts that would have otherwise been previously paid to Executive under this Agreement during such six-month period, without interest. Thereafter, payments will resume in accordance with this Agreement. The provisions of this Section shall apply only to the minimum extent necessary, after application of Section 409A, to avoid the Executive’s incurrence of any additional taxes or penalties under Section 409A. Notwithstanding anything to the contrary contained herein, the Company shall not be responsible for, or have any obligation to reimburse or pay (as damages or otherwise) any taxes or interest charges imposed on the Executive pursuant to Section 409A.
Appears in 5 contracts
Sources: Executive Employment Agreement (Heelys, Inc.), Executive Employment Agreement (Heelys, Inc.), Executive Employment Agreement (Heelys, Inc.)
Section 409A: Separation From Service; Delay of Payments. Notwithstanding any provision to the contrary in this Agreement, no payment or benefit shall be paid pursuant to Section 7 (including subparts) that would be considered “deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code“ Code ”), or the Treasury regulations or other guidance issued thereunder (““ Section 409A409A ”) until Executive has incurred a “separation from service” (as such term is defined under Section 409A). Further, no payments contemplated by Section 7.2 of this Agreement will be paid during the six-month period following Executive’s Termination Date unless the Company determines that Executive is not a “specified employee” (as that term is defined under Section 409A), or if the Company determines that Executive is a “specified employee,” that paying such amounts would not cause the Executive to incur an additional tax under Section 409A. The six-month delay described in the preceding sentence shall not apply to the extent (a) the amount of such payment, or any portion thereof, constitutes a “short-term deferral” within the meaning of Section 409A, and (b) to the extent the amount of such payment does not constitute a “short-term deferral,” the amount of such payment, or any portion thereof, does not exceed two times the lesser of (i) the Executive’s annualized compensation based upon the Executive’s annual rate of pay for services provided to the Company for the taxable year of the Executive preceding the taxable year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely had no separation from service occurred), or (ii) the maximum amount of compensation that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Termination Date occurs. If the payment of any amount under Section 7.2 is delayed as a result of this Section, on the first regularly scheduled payroll date following the end of the six-month delay period, the Company will pay the Executive a single lump-sum amount in cash equal to the cumulative amounts that would have otherwise been previously paid to Executive under this Agreement during such six-month period, without interest. Thereafter, payments will resume in accordance with this Agreement. The provisions of this Section shall apply only to the minimum extent necessary, after application of Section 409A, to avoid the Executive’s incurrence of any additional taxes or penalties under Section 409A. Notwithstanding anything to the contrary contained herein, the Company shall not be responsible for, or have any obligation to reimburse or pay (as damages or otherwise) any taxes or interest charges imposed on the Executive pursuant to Section 409A.
Appears in 1 contract
Section 409A: Separation From Service; Delay of Payments. Notwithstanding any provision to the contrary in this Agreement, no payment or benefit shall be paid pursuant to Section 7 (including subparts) that would be considered “deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or the Treasury regulations or other guidance issued thereunder (“Section 409A”) until Executive has incurred a “separation from service” (as such term is defined under Section 409A). Further, no payments contemplated by Section 7.2 of this Agreement will be paid during the six-month period following Executive’s Termination Date unless the Company determines that Executive is not a “specified employee” (as that term is defined under Section 409A), or if the Company determines that Executive is a “specified employee,” that paying such amounts would not cause the Executive to incur an additional tax under Section 409A. The six-month delay described in the preceding sentence shall not apply to the extent (a) the amount of such payment, or any portion thereof, constitutes a “short-term deferral” within the meaning of Section 409A, and (b) to the extent the amount of such payment does not constitute a “short-term deferral,” the amount of such payment, or any portion thereof, does not exceed two times the lesser of (i) the Executive’s annualized compensation based upon the Executive’s annual rate of pay for services provided to the Company for the taxable year of the Executive preceding the taxable year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely had no separation from service occurred), or (ii) the maximum amount of compensation that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Termination Date occurs. If the payment of any amount under Section 7.2 is delayed as a result of this Section, on the first regularly scheduled payroll date following the end of the six-month delay period, the Company will pay the Executive a single lump-sum amount in cash equal to the cumulative amounts that would have otherwise been previously paid to Executive under this Agreement during such six-month period, without interest. Thereafter, payments will resume in accordance with this Agreement. The provisions of this Section shall apply only to the minimum extent necessary, after application of Section 409A, to avoid the Executive’s incurrence of any additional taxes or penalties under Section 409A. Notwithstanding anything to the contrary contained herein, the Company shall not be responsible for, or have any obligation to reimburse or pay (as damages or otherwise) any taxes or interest charges imposed on the Executive pursuant to Section 409A.or
Appears in 1 contract