Section 409A Change in Control Clause Samples

The Section 409A Change in Control clause defines how certain compensation or benefits are handled in the event of a change in ownership or control of a company, in compliance with Section 409A of the Internal Revenue Code. Typically, this clause specifies the conditions under which deferred compensation may be paid out or accelerated if the company is sold, merged, or undergoes a significant restructuring. Its core function is to ensure that any payments triggered by a change in control are structured to avoid adverse tax consequences for employees and to maintain compliance with federal tax regulations.
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Section 409A Change in Control. If a Section 409A Change in Control occurs while you are a director and on or before the last day of the Performance Period, then the Company will [issue][pay] to you [shares of Common Stock][cash] in an amount equal to the product of the Target Value of each Performance Unit multiplied by the number of Performance Units that were awarded to you under this Agreement and a fraction, the numerator of which is the number of years from the beginning of the Performance Period (rounded up to the nearest full year) through the date of the Section 409A Change in Control and the denominator of which is the number of years in the Performance Period[divided by the Fair Market Value of a Share of Common Stock on the first business day immediately preceding the Payment Date]. [Any amount payable to you pursuant to this Section 4.2(i) will be paid by the Company to you t][T]en (10) business days after the date of the Section 409A Change in Control [, the Company will issue to you one share of the Common Stock for each Performance Unit granted to you under this Agreement. Such shares will be issued][. Such payment will be made] to you in exchange for the Performance Units and thereafter you shall have no further rights with respect to such Performance Units or the Agreement and the Company will have no further obligations to you pursuant to the Performance Units or the Agreement.
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Section 409A Change in Control. If this Employment Agreement is terminated pursuant to Section 4(d) (Without Cause) or Section 4(e) (for Good Reason) within two years after a Section 409A Change in Control of the Company has occurred, or if a Section 409A Change in Control of the Company occurs while the Company is making severance payments to the Executive pursuant to Section 5(b), Executive shall receive the severance payments specified in Section 5(b) (or the remaining balance thereof) in a lump sum. The lump sum shall be paid within 30 days after the effective date of the Executive’s Separation from Service or, if the Section 409A Change in Control occurs after the Executive’s Separation from Service, within 30 days after such Section 409A Change in Control. Notwithstanding the foregoing, the severance payments specified in Section 5(b) shall not be paid to the Executive (except for the lump sum equal to six monthly payments provided in the third sentence of Section 5(b)) before the day following the 6-month anniversary of the Executive’s Separation from Service unless Executive shall have received an opinion of counsel satisfactory to the Executive that payment before that date will not be a violation of Code Section 409A(a)(2)(B)(i) (concerning the 6-month delay rule). In the event that the Executive shall fail to obtain such an opinion of counsel, the Company or its successor shall, within 30 days after the later of the Executive’s Separation from Service or the Section 409A Change in Control, transfer the remaining balance of the monthly payments due the Executive to a rabbi trust (similar to the trust described in Revenue Procedure 92-64) under a trust agreement that requires payment of such remaining balance to the Executive in a lump sum on the day following the 6-month anniversary of the Executive’s Separation from Service.
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Section 409A Change in Control. The term “Section 409A Change in Control” means a Change in Control with is also constitutes a change in control event within the meaning of Code Section 409A.
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Section 409A Change in Control. The portion of any payment or benefit which constitutes Section 409A deferred compensation and which would otherwise be payable in a lump sum pursuant to Section 3.2 upon a Change in Control that does not qualify as a Section 409A Change in Control shall be paid based upon the time and form of payment set forth in Section 3.2, and with respect to other awards or programs in accordance with the plan or other documents governing such award.
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Section 409A Change in Control. Notwithstanding any other provision of this Agreement to the contrary, if a Section 409A Change in Control occurs before the last day of the Performance Period then the Company will issue to you shares of Common Stock in an amount equal to the product of (1) and (2) where (1) is the number of shares you would have received under this Agreement if the Section 409A Change in Control had not occurred before the end of the Performance Period and (2) is a fraction, the numerator of which is the number of years from the beginning of the Performance Period (rounded up to the nearest full year) through the date of the Section 409A Change in Control and the denominator of which is the number of years in the Performance Period. Any amount payable pursuant to this Section 4.5 will be paid to you on the Date of the Section 409A Change in Control. After such Shares are issued to you, you will have no further rights with respect to this Agreement and the Company will have no further obligations to you pursuant to this Agreement.
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Related to Section 409A Change in Control

  • Change in Control Event (a) Participants may elect upon initial enrollment to have accounts distributed upon a Change in Control Event. (b) A Change in Control shall not be a Qualifying Distribution Event.

  • Change in Control For purposes of this Agreement, a "Change in Control" shall mean any of the following events:

  • Change in Control Severance Except as otherwise set forth herein, if a Change in Control occurs, and on, or at any time during the 24 months following, the Change in Control, (i) the Company terminates Executive’s employment for any reason other than Cause or Disability, or (ii) Executive terminates Executive’s employment for Good Reason, Executive shall be entitled to the following benefits: (i) The Company shall pay Executive, in a lump sum within 60 days following termination of Executive’s employment, severance equal to two times the sum of Executive’s Base Salary and Bonus (the full, non- prorated Bonus for the year of termination assuming attainment of the targeted performance goals at the 100% payout level). (ii) Executive also shall be entitled to receive any and all vested benefits accrued under any other incentive plans to the date of termination of employment, the amount, entitlement to, form, and time of payment of such benefits to be determined by the terms of such incentive plans. For purposes of calculating Executive’s benefits under the incentive plans, Executive’s employment shall be deemed to have terminated under circumstances that have the most favorable result for Executive under the applicable incentive plan. (iii) If, upon the date of termination of Executive’s employment, Executive holds any awards with respect to securities of the Company, (i) all such awards that are options shall immediately become vested and exercisable upon such date and shall be exercisable thereafter until the earlier of the third (3rd) year anniversary of Executive’s termination of employment or the expiration of the term of the options; (ii) all restrictions on any such awards of restricted stock, restricted stock units or other awards shall terminate or lapse, and all such awards of restricted stock, restricted stock units or other awards shall be vested and payable; and (iii) all performance goals applicable to any such performance-based awards that are “in cycle” (i.e., the performance period is not yet complete) shall be deemed satisfied at the “target” level (assuming 100% payout), and (iv) all such awards shall be paid in accordance with the terms of the applicable award agreement. The provisions of this subsection shall be subject (and defer) to the provisions of any incentive plan, award agreement or other agreement as it relates to an individual award to the extent such provisions provide treatment that is more favorable to Executive than the treatment described in this subsection and such more favorable provisions in such incentive plan, award agreement or other agreement shall supersede any inconsistent or contrary provision of this subsection. All of Executive’s awards with respect to securities of the Company that are outstanding upon the date of termination of Executive’s employment shall continue to be subject to, and enjoy the benefits and protections under, the terms of the incentive plan, the award agreement and any other plan, agreement, policy or other arrangement to which such awards are subject as of the effective date of Executive’s participation, including any employment security agreement or other written compensation arrangement (even if the remaining terms thereof are waived), without application of this subsection. (iv) Executive and Executive’s spouse and other qualified beneficiaries shall be eligible for continued coverage as follows: (A) If the Executive, Executive’s spouse and/or Executive’s other qualified beneficiaries are enrolled under a group health plan as defined by COBRA, on the date of termination of Executive’s employment, Executive, Executive’s spouse and/or Executive’s qualified beneficiaries may elect to continue such coverage under COBRA, except that the maximum coverage period shall be extended to no less than the Severance Period (but no more than 2 years) for that Executive, unless, after electing COBRA, the individual attains age 65 and becomes eligible for Medicare, in which case COBRA shall end for that individual. If Executive, Executive’s spouse and/or Executive’s other qualified beneficiaries elect COBRA coverage, the Company shall pay a portion of the COBRA costs for the Severance Period for that Executive (subject to any earlier termination of COBRA). The portion to be paid by the Company shall equal the amount necessary so that the total of the COBRA costs paid by Executive is equal to the costs that would have been paid by Executive for such coverage as an active employee immediately prior to termination of Executive’s employment or, if less, prior to the Change in Control. The cost of COBRA coverage paid by the Company may be taxable income to the Executive and reported on Executive’s Internal Revenue Service Form W-2. Executive, Executive’s spouse and/or Executive’s qualified beneficiaries may continue coverage under COBRA after the Severance Period for that Executive, provided they pay the full COBRA costs and COBRA otherwise remains available. (B) The benefits and/or extended coverage provided under this subsection shall cease prior to the date such benefits and/or extended coverage would otherwise end under subsection if and when Executive (A) obtains employment with another employer during the Severance Period and becomes eligible for coverage under any substantially similar plan provided by his/her new employer or (B) fails to pay the required active employee portion of the cost of coverage provided under this subsection in the time and manner specified by the Company or its designee. (v) Executive shall be entitled to payment for any accrued but unused vacation in accordance with the Company’s policy in effect at the time of termination of Executive’s employment, in a lump sum within 60 days following such termination. Executive shall not be entitled to receive any payments or other compensation attributable to vacation that would have been earned had Executive’s employment continued during the Severance Period, and Executive waives any right to receive any such compensation. (vi) The Company shall, at the Company’s expense, provide Executive with 12 months of executive outplacement services with a professional outplacement firm selected by the Company; provided that Executive must use the outplacement services by no later than the end of the second calendar year following the calendar year in which the termination of Executive’s employment occurred and the total cost of such outplacement services must not exceed any per individual cap on such amounts in the Company’s agreement with the professional outplacement firm selected by the Company. (vii) Executive shall not be entitled to reimbursement for any other fringe benefits or perquisite payments during the Severance Period, including but not limited to dues and expenses related to club memberships, automobile, cell phone, expenses for professional services, executive physicals, and other similar perquisites. (viii) The Company shall pay as incurred (within ten calendar days following the Company’s receipt of an invoice from Executive) Executive’s out-of-pocket expenses, including attorneys’ fees, incurred by Executive at any time from the date of this Agreement through Executive’s remaining lifetime or, if longer, the statute of limitations for contract claims under applicable state law, in connection with any action taken to enforce the Executive’s rights under this Agreement or construe or determine the validity of this Agreement or otherwise in connection herewith, including any claim or legal action or proceeding, whether brought by Executive or the Company or another party; provided, Executive must be successful through judgment in his/her favor with respect to such action in order to recover fees under this Section 5(f)(viii); provided further, that Executive shall have submitted an invoice for such fees and expenses at least fifteen calendar days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred. The amount of such legal fees and expenses that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, and Executive’s right to have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit. The Company’s obligation to pay Executive’s eligible legal fees and expenses under this Section 5(f)(viii) shall not be conditioned upon the termination of Executive’s employment.

  • No Change in Control Guarantor shall not permit the occurrence of any direct or indirect Change in Control of Tenant or Guarantor.

  • Deferral Pending Change in Control The obligation of the Company to prepay Notes pursuant to the offers required by subparagraph (b) and accepted in accordance with subparagraph (d) of this Section 8.7 is subject to the occurrence of the Change in Control in respect of which such offers and acceptances shall have been made. In the event that such Change in Control does not occur on the Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until and shall be made on the date on which such Change in Control occurs. The Company shall keep each holder of Notes reasonably and timely informed of (i) any such deferral of the date of prepayment, (ii) the date on which such Change in Control and the prepayment are expected to occur, and (iii) any determination by the Company that efforts to effect such Change in Control have ceased or been abandoned (in which case the offers and acceptances made pursuant to this Section 8.7 in respect of such Change in Control shall be deemed rescinded).