for the Section 409A regulations to address what happens when the US government obtains control of a US company… Well, the IRS didn’t back then, but it has now.
One of the events that can trigger a distribution from a nonqualified deferred compensation plan governed by Section 409A is a change in ownership of effective control of a company, or a change in the ownership of a substantial portion of the company’s assets (“change in control”). In Notice 2009-49, the Service has clarified that the government’s acquisition of stock or warrants of a financial institution or other entity will NOT result in a change in control for Section 409A purposes, and will not trigger distributions from nonqualified deferred compensation plans maintained by those companies.
Filed under: Finance
