Common use of 409A Exemption Clause in Contracts

409A Exemption. The right to a series of payments under this Agreement will be treated as a right to a series of separate payments. Each such payment that is made within 2 ½ months following the end of the year that contains the Termination Date is intended to be exempt from Section 409A as a short-term deferral within the meaning of the final regulations under Section 409A. Each such payment that is made later than 2 ½ months following the end of the year that contains the Termination Date is intended to be exempt under the two-times exception of Treasury Reg. §1.409A-1(b)(9)(iii), up to the limitation on the availability of that exception specified in the regulation. Then, each payment that is made after the “two-times” exception ceases to be available shall be subject to delay, as necessary, as specified below.