"Issue: Whether a nonstatutory stock option or a stock-settled stock appreciation right with respect to common stock of a nonqualified entity is a nonqualified deferred compensation plan subject to taxation under section 457A of the Internal Revenue Code[.] ... Law and Analysis: ... [N]either stock right [in the scenario presented in this ruling] with respect to common shares of Service Recipient granted to Service Provider is a nonqualified deferred compensation plan for purposes of section 457A(a) because each is either a nonstatutory stock option that meets the requirements of 1.409A-1(b)(5)(i)(A) or a stock appreciation right that meets the requirements of 1.409A-1(b)(5)(i)(B) and at all times by its terms must be settled, and is settled, in service recipient stock. The stock rights granted to Service Provider are accordingly exempt from section 457A."

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