WHAT IS A NON-QUALIFIED DEFERRED COMPENSATION PLAN?

A NQDC plan is an arrangement or contractual agreement….

• between an employer and one or more key employees, 
• to defer receipt of income on a pre-tax basis to a future date, 
• which sets forth when and how distributions will take place at the time of the deferral election,

 under which the employer agrees to pay monies the service provider (i.e., employee or independent contractor) has a legal right to receive at an irrevocable distribution date designated in the deferral election form, unless one of the following statutory triggers occurs: 

§  separation from service,

§  death,

§  disability,

§  change of control or change of ownership,

§  extreme hardship, or

§  bankruptcy or insolvency