Common use of Internal Revenue Code Section 409A Compliance Clause in Contracts

Internal Revenue Code Section 409A Compliance. It is the intent of the parties to comply with all applicable Internal Revenue Code Sections, including, but not limited to, IRC 409A. Furthermore, for the purposes of this Agreement, IRC Section 409A shall be read to include any related or relevant IRS Notices or clarifications (including but not limited to Notice 2006-79 and Notice 2007-86). While it is understood that a general IRC 409A savings clause will not be effective, the parties intend that any ambiguities regarding any terms or payouts contained herein shall be interpreted in a manner consistent with IRC 409A. In addition, for any benefits payable pursuant to this Agreement due to a Separation From Service, if the individual is a Specified Employee (as defined herein and by IRC 409A), any such benefit shall be withheld for six (6) months following such Separation From Service in order to comply with IRC 409A, if necessary. In addition, for any individual affected by this six (6) month delay in payment imposed by IRC 409A, and if and/or when applicable, the aggregate amount of the first seven (7) months of installments shall be paid at the beginning of the seventh month following the date of Separation From Service. Monthly installment payments shall continue thereafter if called for. In addition, as stated above, it is the intent of the parties to comply with IRS Notice 2007-86, and thus, for any new election made in 2008, that new election may not apply to amounts that would otherwise be payable in 2008, and may not cause amounts to be paid in 2008 that would not otherwise be payable in that year. In the event any such new election would accelerate a payment into 2008, then such resulting payment shall not be made until January 3, 2009 (so long as permitted by IRC 409A and any subsequent guidance).