Common use of Section 409A Delay in Payment Clause in Contracts

Section 409A Delay in Payment. (i) Notwithstanding the foregoing provisions of this Agreement, if a payment under this Agreement is due to a “separation from service” for purposes of the rules under Title 26 of the Code of Federal Regulations (the “Treasury Regulations”) Section 1.409A-3(i)(2) (the “Six Month Delay Rule”) and the Executive is determined to be a “specified employee” (as determined under Treasury Regulation Section 1.409A-1(i) and related Company procedures), such payment shall, to the extent necessary to comply with the requirements of Code Section 409A, be made on the later of the date specified by the foregoing provisions of this Section 7 or the date that is six months after the date of the Executive’s separation from service. If any cash payment is delayed pursuant to this Section 7(f)(i), interest on such delayed payment (determined using the short-term “applicable federal rate” compounded monthly as published by the Internal Revenue Service for the month preceding the Executive’s separation from service) shall accrue and be paid at the same time as the delayed payment. (ii) To the extent that the Six Month Delay Rule applies to the provision of life insurance coverage to the Executive as described in Section 7(b)(iii) (the “Life Insurance Coverage”), such Life Insurance Coverage shall nonetheless be provided to the Executive during the first six months following his separation from service (the “Six Month Period”), provided that, during such Six-Month Period, the Executive pays to the Bank, on a monthly basis in advance, an amount equal to the monthly cost of such Life Insurance Coverage. The Bank shall reimburse the Executive for any such payments made by the Executive in a lump sum not later than 60 days following the sixth month anniversary of the Executive’s separation from service. For purposes of this Section 7(f)(ii), “monthly cost” means the minimum dollar amount which, if paid by the Executive on a monthly basis in advance, results in the Executive not being required to recognize any federal income tax on receipt of the Life Insurance Coverage during the Six Month Period.