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Labor, Employment and Benefits: Alert - November 10, 2009

On October 28, 2009, President Obama signed into law a Defense Department Fiscal Year 2010 authorization bill that expands the Family and Medical Leave Act’s (FMLA) requirements with respect to “qualifying exigency leave” for family of military members and “military caregiver leave.” Specifically, qualifying exigency leave now applies to employees who have family members on active duty military service in a for­eign country, and military caregiver leave applies to family members of veterans, not just active duty service members. Although the law does not specify an effective date, it ap­pears to take effect immediately.

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Intellectual Property and Technology: Alert - November 17, 2009

Governor Patrick’s Office of Consumer Af¬fairs and Business Regulation announced on November 4, 2009, that it has filed the final Massachusetts ID Theft Regulation, also known as 201 CMR 17:00. The goal of Regulation 201 is to help combat the loss of personal information; the most significant change is a require¬ment that covered entities amend existing agreements that they have with third-party service providers to include language requiring these providers to implement and main¬tain “appropriate” security measures for the protection of personal information.

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Business and Tax
Alert - November 8, 2005
 
New Section 409A Deferred Compensation Rules Are Extensive
 
 November 8, 2005
 

The IRS has recently issued extensive regulations under Section 409A of the Internal Revenue Code. These new rules will have a pervasive and often unexpected impact on how companies compensate their employees, directors and other service providers. If any of the situations listed below apply to your company, learning more about these new rules will help you understand if you may need to act before some of the transitional rules expire on December 31, 2005. Plan amendment relief is available through December 31, 2006, so that plans may be retroactively cured as of January 1, 2005. However, relief from the new rules through termination of an existing plan must be done by December 31, 2005 to be effective.

• Has your company issued options to any service provider where the exercise price is less than the fair market value of the company’s stock?

• Has your company issued fair market value options without an appraisal or fairness opinion to support the valuation of the company’s stock?

• Do you have any pre-October 3, 2004, deferred compensation, phantom stock, stock appreciation rights agreements, or plans with one or more service providers?

• Do you have any piggy-back plans or arrangements, where the payout elections under an ERISA tax qualified plan also control the payout under a non-qualified deferred compensation plan?

• Has any service provider been issued restricted stock or other deferred compensation that is not yet payable, but is no longer subject to a risk of forfeiture?

• Have you made any material change to a non-qualified deferred compensation arrangement or plan on or after October 3, 2004?

• Do you have any severance agreements where all or part of the payment is due more than 2-1/2 months after termination and the benefit is not forfeitable?

• Do you have any retirement plans where the executive can accelerate payment of benefits by agreeing to take a reduced amount (so-called “haircut provisions”) or plans where payments may be accelerated for unexpected emergencies or disability?

• Do you have any rabbi trusts or other funding mechanisms for deferred compensation arrangements where the assets are held outside the United States?

• Are you a public company where key employees are not subject to a six-month delay in payments under all non-qualified plans or agreements?

For more information, contact your regular Holland & Knight attorney.

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