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Employee Stock Purchase Plans Archives - Help with mergers & acquisitions, raising capital, creating stock options and other equity plans

Posts Tagged ‘Employee Stock Purchase Plans’

Employee Stock Purchase Plans – Learning the Basics

 

Will your ESPP help you reel in some cash?

Will your ESPP help you reel in some cash?

Employee stock purchase plans and all that may be associated with them are tough topics to fully comprehend, and while each company may have their own individual plans and procedures, the core concepts remain traditionally the same. The most frequently asked questions arise when an employee is faced with participating in an employee stock purchase plan for the very first time. To help ensure that you have an understanding of the choices, we have compiled a list of common questions and answers with the help of Fidelity.com, covering all the core concepts associated with these plans. Read the rest of this entry »

Non-Qualified Stock Options – How Are They Different?

Will time bring you more money?

Employee stock options come in many forms and, because of the vast variety of option types, it can be very easy to become overwhelmed. Whether it is incentive stock options, restricted stock options, qualified or non-qualified stock options, each has its own set of rules, regulations and tax implications that need to be understood in order to fully capitalize upon the potential value of each option type. Understanding non-qualified stock options can be intimidating but our recent resource video will help get you all the answers you may be looking for.

What are non-qualified stock options?

Non-qualified stock options are a form of stock option that does not become taxable until the exercise date. This form of stock option is much simpler than qualified stock options because they do not meet all Internal Revenue Code requirements. Additionally, a non-qualified stock option can be granted to anyone, not just a company’s employee. Read the rest of this entry »

Acquisition: What Happens After a Shift of Power? Part 4

Will you ever see a profit in an acquisition?

In our last blog post, we discussed vested and unvested options in relation to an impending acquisition. Today, in part four of our series, we will determine how terms of an acquisition deal, valuation and option conversion can affect your stock options during a shift of power.

Acquisition Terms:

When you are granted a plan for your stock options, be sure to review any and all clauses concerning potential shifts in power. This includes a merger or acquisition.  Your plan should always map out the conditions of any acquisition in relation to your stock options. However, the future of those options and what you may receive from an acquiring  company will be directly dependent upon the terms of the merger or acquisition deal.   Read the rest of this entry »

Employee Stock Purchase Plans – Understanding the Essentials Part 2

Photo Credit: Borman818

In our last blog post we introduced two of the four essentials that anyone with employee stock purchase plans should be aware of. In this post we will get acquainted with the remaining two essentials and introduce new details for understanding your employee stock purchase plans.

They remaining two essentials are:

3. Be aware of life changes and their impacts: There are countless occurrences that could impact the existence of employee stock purchase plans. Being aware of your own plan inside and out will help ensure that you are prepared for changes as they come down the line. These job or life changes can include anything from termination, resignation, mergers and acquisitions or even death and divorce. Prepare yourself with a wealth of knowledge in relation to your employee stock purchase plans and seek professional advice if necessary.

4. Know your holding periods: If a change in employee stock purchase plans occurs before the appropriate timeline is fulfilled it can result in what is called a disqualifying disposition. This happens if any kind of transfer happens before satisfying your employee stock purchase plan holding periods. While they do differ from plan to plan, it is common for holding periods to be 2 years after employee stock purchase plans are granted, and 1 year after actual purchase. Keep this timeline in mind as there are various penalties that could come with a disqualifying disposition including removal from eligibility for favorable tax treatments.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

Employee Stock Purchase Plans – Understanding the Essentials Part 1

 

Photo Credit: AMagill

Employee stock purchase plans can hold immense financial purpose and benefit. Understanding the procedures and processes to properly capitalize upon the benefits of employee stock purchase plans is especially important.

This two part blog series will introduce four of the essentials for understanding employee stock purchase plans and will help better your financial experience. They first two essentials are:

  1. Know how to enroll and follow procedures: Employee stock purchase plans have very detailed rules for enrollment and they will differ with every company. Be sure to understand the procedures, forms and eligibility rules before enrolling in your own plan. Be conscious of what you are authorizing by signing these forms and enrolling into your plan. We also suggest being aware of enrollment dates with an understanding of an “election period” and “open enrollment.”
  1. Understand tax qualifications: There are multiple types of employee stock purchase plans and being mindful of both tax and non-tax qualified plans will help you understand your own employee stock purchase plan better. Having this understanding will also aid in the future filings of tax returns. Do your research and be proactive about educating yourself on all aspects of your plan and how your financial decisions can affect your taxations and general outcomes. Seek professional advice if necessary.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

Strategy for Employee Stock Purchase Plans in 2012

We recently explained that the Bush tax cuts will be ending at the end of this year. With the expiration of these rates approaching so quickly upon us, changes in future taxation has led us to urge those with employee stock purchase plans to take great care in creating a year-end strategy for moving forward in the New Year.

There are various aspects to take into consideration when planning for the future of your employee stock purchase plans. Please keep in mind, however, that an increase in tax rates should not be the only reason to plan for a sale of stocks. The following are a few of the factors to consider when devising strategy for your employee stock purchase plans: Read the rest of this entry »

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