Final IRS 409A Regulations on Deferred Compensation Issued

On April 10, 2007, the Treasury Department and the Internal Revenue Service ("IRS") issued the long-awaited final regulations interpreting the deferred compensation rules under Internal Revenue Code (the "Code") Section 409A ("Section 409A"). Section 409A was added to the Code by the American Jobs Creation Act of 2004 and is generally effective for compensation deferred on or after January 1, 2005 (as well as prior deferrals which were not vested as of January 1, 2005), under certain nonqualified deferred compensation plans and arrangements ("nonqualified plans").

Amounts subject to Section 409A that are deferred under a nonqualified plan are subject to current income taxation unless the nonqualified plan complies in form and in operation with the election, distribution and acceleration requirements of Section 409A. Failure to comply with the Section 409A requirements at any time during a taxable year will cause all amounts deferred under the nonqualified plan for that year and all