Multi-Year Consulting Agreement

[Christine Roberts]

Independent consulting agreement (subject to 409A e.g., independent contractor does not meet any exclusion requirements) provides for a monthly compensation amount to be paid on the fist day of each month during the 10-year term of the agreement.

Even though the agreement creates an enforceable right to compensation paid in a later year (and does not subject the compensation to any substantial risk of forfeiture) does not the "payable on the first of the month" requirement put the arrangement within the short term deferral rule?

Same example as above, however the compensation amount is increased by $25,000 per year, payable monthly, provided certain company-wide annual sales goals are met. Agreement is silent on when it is determined that the sales goals are determined to have been satisfied each year. Under these provisions, short term deferral rule is not met.

Any comments, rebuttals or thoughts appreciated.