Good Reason provisions -- clarifying amendment permissible?

[Guest Mr. Kite]

Executive agreement provides for separation pay upon "good reason" termination, and the agreement provides, among other things, that there is a "good reason" condition if the executive's office is relocated more than 25 miles from its current location. Read literally, this provision will apply even if the office is moved closer to the executive's residence -- for example, if the executive lives 35 miles from the office, and the office is then relocated to within 5 miles of the residence.

I believe this provision was intended to apply if the office relocation increased the executive's commute by 25 miles or more, and was the victim of lazy drafting. Assuming that the intended meaning of this provision would constitute a "good reason" condition (not under the safe harbor, but under the facts/circumstances test), could the executive and the company execute some type of clarifying amendment or a memorandum of understanding regarding the intended meaning of the provision to bring it within the involuntary separation pay plan rules?

I think that if the executive were to attempt to enforce the provision in a situation that does not appear to involve a true involuntary type of termination, the company would argue against the payment.

Any suggestions on how to deal with this provision?

[henry pass]

Mr. Kite, did you ever receive an answer to your question in 2009 regarding IRC 409A's requirement for minimum relocation distance as a basis for good reason employee terminations. If so, please call me at 610-660-8001 or e-mail me at hip@hipesq.com.  

Thank you,

Henry Pass, Esq.