Stock Options

News & Analysis as of

Opting To Learn About Stock Options In A Divorce

Many businesses choose to reward their employees with stock options in lieu of other forms of compensation. Frequently, these options are not vested when awarded, but rather vest over time....more

Negotiating the Option Pool

Many people think a high(er) valuation is the Holy Grail. Those people are (often) wrong. In pursuit of a high(er) valuation, founders often unwittingly give up valuable ownership percentage points by agreeing to a...more

Tax Talk -- Volume 7, No. 2 -- July 2014

In This Issue: - As FATCA Begins, IRS Rolls out Withholding Forms, Increases IGA Count - IRS Issues Final Circular 230 Rules Simplifying Written Tax Advice Requirements - Mortgage CCA Raises More...more

IRS Pursues 409A Audits, Issues Ruling on Certain Options/SARs under 457A

IRS audits signal focus on Section 409A compliance; Revenue Ruling makes certain nonqualified options and stock appreciation rights more attractive for offshore entities. The IRS has begun its limited audit initiative...more

Term Sheet Math — When Is Your 66 Percent Really 52 Percent?

When negotiating valuation for a financing, an investor may conduct detailed due diligence and present you with a term sheet that reflects multiples, discounts, comparables, and so forth. In the end, you are negotiating for...more

IRS Begins Section 409A Compliance Initiative

The Internal Revenue Service (IRS) is getting ready to ramp up enforcement of Section 409A of the Internal Revenue Code. The federal agency recently announced the launch of a new project to assess the level of taxpayer...more

Supreme Court Rejects Presumption of Prudence for Company Stock, but Hurdles for Plaintiffs Remain

This week, the U. S. Supreme Court rejected a long-standing “presumption of prudence” that protected an ERISA fiduciary’s decision to allow qualified retirement plan participants to invest in company stock. However, the...more

IRS Issues Revenue Ruling on Applicability of Section 457A to Options and Stock Appreciation Rights

On June 10, 2014, the IRS issued Revenue Ruling 2014-18, which holds that nonqualified stock options, as well as stock-settled stock appreciation rights (SARs), do not constitute nonqualified deferred compensation subject to...more

IRS Ruling Allows Tax-Deferred Stock Rights for Fund Managers

Section 457A of the Internal Revenue Code (the Code) generally restricts the ability of offshore funds and other entities domiciled in tax-indifferent jurisdictions to offer tax-advantaged deferred compensation to U.S....more

Possible Offshore Deferrals for Hedge Fund Managers – IRS Confirms That Certain Stock Options and Stock Appreciation Rights Are...

The Internal Revenue Service (the "IRS") has issued Revenue Ruling 2014-18 (the "Ruling"), which generally confirms that a stock-settled stock option or stock appreciation right that is granted with an exercise/base price of...more

An Appreciation for Hedging Your Bets on Deferred Compensation: IRS Issues Revenue Ruling 2014-18 Under Section 457A of the...

Under Section 457A of the Internal Revenue Code of 1986 (the “Code”), certain offshore and other entities are limited in their ability to provide tax-effective deferred compensation to providers of services to those entities....more

Survey of Current Benefits Issues

In This Presentation: - Affordable Care Act - Affordable Care Act: Fees and Taxes 2015 – Employer Shared Responsibility Fee - Forms for Reporting Fees - Retirement Plan Errors - Overview - Retirement Plan...more

Houseman v. Sagerman, C.A. No. 8897-VCG (Del. Ch. Apr. 16, 2014) (Glasscock, V.C.)

In this opinion, the Court of Chancery held that the plaintiffs failed to adequately plead that the board failed to satisfy its Revlon duties in good faith and to negotiate consideration for alleged derivative claims that...more

"Executive Compensation and Benefits Alert: Ways and Means Tax Reform Bill Proposes Fundamental Changes to Executive Compensation"

House Ways and Means Committee Chairman David Camp (R-Mich.) has proposed a draft tax reform plan (the Proposal) containing sweeping changes to the Internal Revenue Code (the Code), including a number of major executive...more

Labor & Employment E-Note - February 14, 2014

In This Issue: - High Court Rules Steel Workers Need Not be Paid for Changing Clothes - NLRB Proposes Rules to Streamline Unionization Voting Process - Obama Administration Delays Another Health Insurance...more

Employers: 2014 Deadlines to Furnish ISO and ESPP Information Statements and Returns

Employers, from startups to public companies, need to be aware of the following requirements and take action by January 31st if they apply. Section 6039 of the Internal Revenue Code requires a corporation to furnish a...more

January 31, 2014 Deadline for Reporting Incentive Stock Option Exercises and Employee Stock Purchase Plan Transfers that Occurred...

As reported in Part 1 of our 2013 End of Year Plan Sponsor “To Do” Lists, Section 6039 of the Internal Revenue Code (the Code) requires employers to provide an information statement to each employee or former employee...more

14 Global Workplace Trends For 2014 (Infographic)

With January in full swing and your first new year’s resolution already broken, here’s one goal you can keep: stay abreast of developments to get ahead of the curve, beginning with the top 14 trends impacting multinational...more

14 Global Workplace Trends for 2014

With January in full swing and your first new year’s resolution already broken, here’s one goal you can keep: stay abreast of developments to get ahead of the curve, beginning with the top 14 trends impacting multinational...more

Employers: 2014 deadlines approach to furnish incentive stock option and employee stock purchase plan information statements and...

Section 6039 of the Internal Revenue Code requires a corporation to furnish a written statement to any employee or former employee who either (i) exercised an incentive stock option within the meaning of Section 422 of the...more

Recent Delaware Decision Highlights Importance of Formalities in Issuing Stock and Potential Utility of New Statutory Ratification...

Late last year, Vice Chancellor John Noble of the Delaware Court of Chancery issued a decision in Boris v. Schaheen that highlights the importance of following formalities when issuing stock. The decision found an array of...more

Is Exercising Employee Stock Options Illegal Insider Trading? Maybe

Amidst the flurry of Securities and Exchange Commission (SEC) cases involving improper employee stock option backdating several years ago, many commentators opined on the potential insider trading implications of companies'...more

ASIC Proposes A Fresh Approach To The Regulation Of Employee Incentive Schemes

WHAT YOU NEED TO KNOW - ASIC is proposing to update and broaden its current employee share scheme class order relief and regulatory guidance in response to developments in market practice and the need for...more

Delaware Chancery Court Permits Shareholder to Bring Fiduciary Claim for Board’s Violation of a Stock Incentive Plan

On November 8, the Delaware Chancery Court denied a motion to dismiss a derivative action brought by a shareholder of Healthways, Inc. against the company’s president, Ben Leedle, Jr., and the board of directors for approving...more

When It Comes To Proxy Statements, The U.S. District Courts May Not Be So Exclusive After All

A recent ruling by Vice Chancellor Donald F. Parsons, Jr. caused me to ponder why a case involving alleged misstatements in a proxy statement filed with the Securities and Exchange Commission wasn’t immediately tossed out on...more

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