Common use of Delays in Payment by Employer Clause in Contracts

Delays in Payment by Employer. A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event, provided that the delay in payment complies with all of the requirements of Treasury Regulation §1.409A-2(b)(7). The delay in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated service providers on a reasonably consistent basis. (a) Payments subject to Code Section 162(m). If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) either (i) during the Executive’s first taxable year in which the Employer reasonably anticipates, or should reasonably anticipate, that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m), or (ii) during the period beginning with the date of the Executive’s Separation from Service and ending on the later of the last day of the year in which the Separation from Service occurs or the 15th day of the third month following the Separation from Service, subject to further delay in accordance with Treasury Regulation §1.409A-2(b)(7) if the Executive is a Specified Employee at the time of the Separation from Service. (b) Payments that would violate federal securities laws or other applicable law. A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate federal securities laws or other applicable law, provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not treated as a violation of law.