On February 8, 2007, the IRS issued Announcement 2007-18 (the “Announcement”) outlining the terms of the “Compliance Resolution Program for Employees Other than Corporate Insiders for Additional 2006 Taxes Arising Under § 409A due to the Exercise of Stock Rights” (the “Program”). While this less-than-succinct appellation readily identifies the purpose and scope of the Program, the requirements for securing relief under it are rather more detailed, as

discussed below.

In brief, the Program allows employers that undertake the corrective actions specified in Announcement 2007-18 to effectively assume responsibility for the additional tax imposed by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), that the optionholders would otherwise bear as a result of their exercise in 2006 of back-dated or discounted stock options.

There is an extensive array of notice requirements associated with the Program and the window of

eligibility for electing to participate in the program is extremely small. Employers choosing to participate in the Program will be required to notify the IRS of their intentions no later than February 28, 2007. Please refer to the table below for a summary of the relevant deadlines associated with participation in the Program.