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For more than four decades, Fenwick & West LLP has helped some of the world’s most recognized companies become, and remain, market leaders. From emerging enterprises to large public corporations, our clients are leaders in the technology, life sciences and cleantech sectors and are fundamentally changing the world through rapid innovation.  MORE >

Fenwick & West was founded in 1972 in the heart of Silicon Valley—before “Silicon Valley” existed—by four visionary lawyers who left a top-tier New York law firm to pursue their shared belief that technology would revolutionize the business world and to pioneer the legal work for those technological innovations. In order to be most effective, they decided they needed to move to a location close to primary research and technology development. These four attorneys opened their first office in downtown Palo Alto, and Fenwick became one of the first technology law firms in the world.  MORE >

From our founding in 1972, Fenwick has been committed to promoting diversity and inclusion both within our firm and throughout the legal profession. For almost four decades, the firm has actively promoted an open and inclusive work environment and committed significant resources towards improving our diversity efforts at every level.  MORE >

At Fenwick, we are proud of our commitment to the community and to our culture of making a difference in the lives of individuals and organizations in the communities where we live and work. We recognize that providing legal services is not only an essential part of our professional responsibility, but also an excellent opportunity for our attorneys to gain valuable practical experience, learn new areas of the law and contribute to the community.  MORE >

Year after year, Fenwick & West is honored for excellence in the legal profession. Many of our attorneys are recognized as leaders in their respective fields, and our Corporate, Tax, Litigation and Intellectual Property Practice Groups consistently receive top national and international rankings, including:

  • Named Technology Group of the Year by Law360
  • Ranked #1 in the Americas for number of technology deals in 2015 by Mergermarket
  • Nearly 20 percent of Fenwick partners are ranked by Chambers
  • Consistently ranked among the top 10 law firms in the U.S. for diversity
  • Recognized as having top mentoring and pro bono programs by Euromoney

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We take sustainability very seriously at Fenwick. Like many of our clients, we are adopting policies that reduce consumption and waste, and improve efficiency. By using technologies developed by a number of our cleantech clients, we are at the forefront of implementing sustainable policies and practices that minimize environmental impact. In fact, Fenwick has earned recognition in several areas as one of the top US law firms for implementing sustainable business practices.  MORE >

At Fenwick, we have a passion for excellence and innovation that mirrors our client base. Our firm is making revolutionary changes to the practice of law through substantial investments in proprietary technology tools and processes—allowing us to deliver best-in-class legal services more effectively.   MORE >

Mountain View Office
Silicon Valley Center
801 California Street
Mountain View, CA 94041
650.988.8500

San Francisco Office
555 California Street
13th Floor
San Francisco, CA 94104
415.875.2300

Seattle Office
1191 Second Avenue
10th Floor
Seattle, WA 98101
206.389.4510

New York Office
1211 Avenue of the Americas
32nd Floor
New York, NY 10036
212.921.2001

Shanghai Office
Unit 908, 9/F, Kerry Parkside Office
No. 1155 Fang Dian Road
Pudong New Area, Shanghai 201204
P.R. China
+86 21 8017 1200


Executive Compensation Alert: Section 409A Error Corrections Before Year End

IRS Notice 2008-113 (the "Notice") permits employers to correct certain operational errors for purposes of Section 409A of the Internal Revenue Code ("Section 409A"). The Notice provides transition relief that allows certain errors that occurred between 2005 through 2007 to be corrected in 2009 as if they were corrected in the tax year following the occurrence of the errors. Employers only have until the end of 2009 to take advantage of this relief with respect to 2005 through 2007 tax years.

Section 409A is designed to place restrictions on nonqualified deferred compensation arrangements and subject noncompliant arrangements to a 20% additional.

Section 409A tax (with an additional 20% tax in California). Section 409A's reach potentially extends far beyond traditional deferred compensation arrangements into employment agreements, bonus provisions and even certain stock rights. The complexity and confusion of Section 409A has created inadvertent and unintentional operational errors under Section 409A. The Notice permits certain of these errors to be corrected through a correction procedure.

The type of errors that can be corrected under the Notice include:

  • (i) failure to defer amounts;
  • (ii) incorrect payment of amounts;
  • (iii) payments in violation of the six-month deferral rule for public company specified employees;
  • (iv) excess deferrals; and
  • (v) correction of the exercise price of stock rights that would otherwise be exempt from Section 409A.

 The Notice designates three categories for corrections based on how quickly the error is corrected:

  1. The first category is corrections that are made in the same tax year as the error, which generally avoid the 20% additional Section 409A tax and the Section 409A premium interest rate.
  2. The second category is corrections that are made within the next tax year following the year of the error and which do not involve "insiders" ("insiders" generally includes 10% owners, directors and officers). These next year corrections also avoid the 20% additional Section 409A tax and the Section 409A premium interest rate.
  3. The third category is corrections that are made within the second tax year following the year of the error, which corrections avoid the Section 409A premium interest rate but not the 20% Section 409A tax.

Generally, there are no corrections procedures for errors beyond the second tax year following the error.

The Notice also provides transition relief for errors that occurred in 2005 through 2007, and if such errors are corrected in 2009, they will be treated in the second category, i.e., as if they were corrected in the next tax year after the errors occurred. This transition relief does not apply to insiders.

The IRS has recently begun Section 409A audits, focusing primarily on tax years 2006 through 2008. Because companies have only until the end of the year to take advantage of the transition correction procedure set forth in the preceding paragraph, we encourage employers to review their deferred compensation arrangements and take actions to correct, before the end of the year, any errors that are discovered.

For more information, we encourage employers to contact any attorney in the Executive Compensation and Employee Benefits Group.


Scott P. Spector (650.335.7251–sspector@fenwick.com)
Blake W. Martell (650.335.7606–bmartell@fenwick.com)
John E. Ludlum (650.335.7872–jludlum@fenwick.com)
Liza Wells Morgan (650.335.7230–lmorgan@fenwick.com)
Gerald Audant (415.875.2362–gaudant@fenwick.com)
Nicholas F. Frey (650.335.7882–nfrey@fenwick.com)

©2009 Fenwick & West LLP. All Rights Reserved.


The views expressed in this publication are solely those of the author, and do not necessarily reflect the views of Fenwick & West LLP or its clients. The content of the publication ("content") is not offered as legal or any other advice on any particular matter. The publication of any content is not intended to create and does not constitute an attorney-client relationship between you and Fenwick & West LLP. You should not act or refrain from acting on the basis of any content included in the publication without seeking the appropriate legal or professional advice on the particular facts and circumstances at issue.

IRS Circular 230 Disclosure: to ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice in this communication (including attachments) is not intended or written by Fenwick & West LLP to be used, and cannot be used, for the purpose of (i) avoiding penalties under the internal revenue code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.