December 31, 2009 Deadline Approaches for Amendments to Comply with Section 162(m) and to Correct Certain Section 409A Operational Failures
This memorandum is to alert clients that December 31, 2009 is the deadline by which:
- publicly traded corporations must amend certain “good leaver” severance provisions in bonus plans, performance-based restricted stock and restricted stock unit awards, employment agreements and severance arrangements to comply with Section 162(m) of the Internal Revenue Code (the “Code”), unless such provisions are grandfathered under certain limited exceptions, and
- under the IRS’s corrections program relating to Code Section 409A, employers must act to correct certain operational failures, which occurred before January 1, 2009, with respect to non-insider employee deferred compensation arrangements that are otherwise in documentary compliance with Code Section 409A.