DIAGEO LETTERHEAD]Employment Agreement • September 15th, 2008 • Diageo PLC • Beverages
You may have heard of Code Section 409A, which imposes an extra 20% tax on employees who receive payments pursuant to certain plans and individual agreements that provide compensation or severance benefits. Certain states also impose an additional 20% state tax on payments made in violation of Section 409A. Because your employment agreement could fall within the scope of Code Section 409A, we are enclosing—and proposing—a compliance amendment that we believe will exempt it from Code Section 409A.
