Treasury Official Says Extensions of Stock Award Terms and Dividend Rights Covered by 409A

Daniel Hogans, an attorney-advisor in the Office of Tax Policy at the Treasury Department, told a November 17 meeting of the American Law Institute-American Bar Association that rules under Section 409A of the Code for deferred compensation cover stock awards that contain a feature extending the date of the required recognition and/or the right to receive dividends for the award beyond its original terms. He also noted that the accumulation of dividends during the pre-exercise period for the award is considered a discount, making the award subject to 409A.