U.S. Income Portfolios ,U.S. Income Portfolios: Compensation Planning ,Portfolio 385-5th: Deferred Compensatio Table of Contents Worksheet 10 Commentary to Model Equity Compensation Plan Exempt from Section 409A U.S. Income Portfolios U.S. Income Portfolios: Compensation Planning Portfolio 385-5th: Deferred Compensation Arrangements Working Papers Worksheet 10 Commentary to Model Equity Compensation Plan Exempt from Section 409A By Steven H. Sholk, Esq. Steven H. Sholk, Esq. (
[email protected]) is a Director in the Corporate Department of Gibbons P.C. and Chair of the Employee Benefits and Executive Compensation Group. Editor's Note: This is a February 2021 revision of a previous version of this insight. “In most English words and phrases there lurk uncertainties.” Robinson v. United States, 324 U.S. 282, 286 (1945). “Condemned to the use of words, we can never expect mathematical certainty from our language.” Grayned v. City of Rockford, 408 U.S. 104, 110 (1972). The ABC, Inc. Equity Compensation Plan (the “Model Plan”) is designed to satisfy the exemptions for equity compensation plans from Section 409A of the Internal Revenue Code of 1986, as amended (the “code”)1 found in the final Section 409A regulations (the “Final Regulations”).2 The Final Regulations provide exemptions for nonqualified stock options,3 incentive stock options,4 stock appreciation rights (“SARs”),5 and restricted stock.6 1 Section 409A was added to the code by the American Jobs Creation Act of 2004, Pub. L. No. 108- 375, §885, 118 Stat. 1418, 1634–F41. 2 Department of the Treasury, Internal Revenue Service, “Application of Section 409A to Nonqualified Deferred Compensation Plans, Final Regulations,” 72 F.R.