I am probably going to get roasted for asking, but I have read a few too many contradictory opinions on this one. What type of restricted stock intended to be subject to Code section 409A?

I had thought all restricted stock was covered from what I read and heard during the JCEB (?) conference, but I just read a summary from Corbel that said it is not and re-read Q-4 in the Notice. I will admit that this rule of what restricted stock is covered and what is not seems a little arbitrary. Both situations in the Notice sound like a deferral in compensation. Could someone enlighten me as to what I am missing?

Thanks!

I thought that ACTUAL GRANTS of restricted stock grants were exempt, but a PROMISE to make a FUTURE GRANT is not necessarily exempt.

Good old fashioned restricted stock, the value of which is included in income at the time it vests, is not deferred compensation.

A promise to deliver shares of stock in the future is deferred compensation if the shares are delivered, in general, in a year subsequent to the year the employee's future right to the shares is vested.

What about restricted stock where a section 83(b) election is made prior to the vesting of the shares?

I have come back around to this question again. I understand that an actual award of a restricted stock share is not subject to Code section 409A, even though the share value is not include in income because of a vesting process (year of service or attaining a performance goal) and/or restricted period (a la Code section 83). However, what if the service recipient issues a stock certificate but does not give the service provider the actual certificate? The certificate is instead deposited with the service recipient with a stock power endorsed in blank and is not delivered to the service provider until the end of the restricted period (with any restriction removed from the certificate).

Is it enough that the share was issued and is subject to Code section 83 or does there need to be some type of physical delivery?

In addition, what if the service recipient has a separate plan that allows the service provider to make an election to defer the restricted stock share for an additional amount of time so long as the election is made 6 month before the share vests? Does this make plan issuing the restricted stock subject to 409A or both the deferral plan and the issuing plan subject to 409A?

Am I the only one feeling like I am splitting hairs?