Short-Term Deferral Question in Regard to Term of Plan and Acceleration of Restricted Stock Grants

[Guest Tauriffic]

Am I right in concluding (generally) that:

1. qualified stock option plans and non-qualified stock option plans are not covered by 409A to the extent the requirements of the regs are satisfied; and

2. restricted stock grants are not covered by 409A if the employee does not get to transfer the stock until immediately after a substantial risk of forfeiture has lapsed? With regard to question (2), what if the board terms the plan and accelerates the payments before the restrictive period has elapsed? Does the short-term deferral exception still apply? Thanks.

[Guest Harry O]

Restricted stock taxable under Section 83 is not subject to 409A.

[Guest George Chimento]

[Restricted stock taxable under Section 83 is not subject to 409A.]

Would you agree that restricted stock, with repurchase agreements that can be varied with mutual consent, are a good way to avoid the inanity of 409A?

Many of us have clients who have purchased founders' stock at fair value, and who may even have filed protective 83(b) elections, and who generally have purchased stock subject to non-lapse restrictions due to a repurchase agreement at a formula price. Sometimes, the repurchase agreements are renegotiated, during employment or after.

These all seem to be transactions in property and not "deferred compensation" under 409A. Opinions ?