409A Now Effective

Starting January 1, 2009, IRC Section 409A is now effective. Although options granted or unvested after December 31, 2005 are subject to the 409A transition rules, options granted after January 1, 2009 are now subject to 409A. This means that privately-held companies cannot grant stock options without addressing 409A and the Valuation rules outlined thereunder.

The final regulations under 409A can be seen at http://www.treasury.gov/press/releases/reports/td9321.pdf

For questions or comments, please feel free to contact Alan Olsen at (510) 797-8661 x249 or aOlsen@groco.com.

For more information, go to:

409A Valuation Issues Q&A