Common use of 409A Compliance Strategy Clause in Contracts

409A Compliance Strategy. All payments of “nonqualified deferred compensation” (within the meaning of Section 409A) are intended to comply with or be exempt from the requirements of Section 409A, and shall be interpreted in accordance therewith. No party individually, or in combination with any other, may accelerate any deferred payment deemed non-exempt “nonqualified deferred compensation,” except in compliance with Section 409A, and no such amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A. To the extent allowed under Section 409A, the Termination Benefits provided under Section 2 of this Agreement payable upon a termination of employment shall qualify as “involuntary severance” under Section 409A because such amount does not exceed the lesser of (i) two hundred percent (200%) of your annualized compensation from the Company for the calendar year immediately preceding the calendar year during which the termination of employment occurs, or (ii) two hundred percent (200%) of the annual limitation amount under Section 401(a)(17) of the Code for the calendar year during which the termination of employment occurs. Further, to the extent allowed under Section 409A, the Termination Benefits provided under Section 2 of this Agreement made within two and one-half months (2 1/2 months) following the end of the later of the calendar year or the Company’s fiscal year in which your right to such payment vests (i.e., is not subject to a substantial risk of forfeiture for purposes of Section 409A) shall qualify under the “short-term deferral exemption” under Section 409A.