Common use of Application of IRC Code Section 409A Clause in Contracts

Application of IRC Code Section 409A. Notwithstanding any other provision of this Agreement, if on the Employment Termination Date (a) the Company is a publicly traded corporation and (b) the Company determines that the Executive is a “specified employee,” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then to the extent any amount payable under this Agreement (i) is payable as a result of the separation of the Executive’s service, (ii) constitutes the payment of nonqualified deferred compensation within the meaning of Section 409A of the Code and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of the Employment Termination Date, such payment shall be delayed until the six-month anniversary of the Employment Termination Date. This Agreement shall be interpreted and construed in a manner that avoids the imposition of excise taxes and other penalties under Section 409A of the Code (“409A Penalties”). In the event the terms of this Agreement would subject the Executive to 409A Penalties, the Company and the Executive shall cooperate diligently to amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible. Notwithstanding the foregoing, under no circumstance shall the Company be responsible for any taxes, penalties, interest or other losses or expenses incurred by the Executive due to any failure to comply with Section 409A of the Code, except that the Company shall be responsible for such taxes, penalties, interest, losses or expenses that result from a payment by the Company to the Executive in contravention of the Executive’s written instructions to the Company, which payment constitutes an act of negligence by the Company. The Company shall pay the Executive interest on any severance payment delayed in order to comply with Section 409A of the Code in accordance with the Company’s policy for other senior executives of the Company.