Outten & Golden assists employees in understanding the terms of their equity and stock grants and negotiates agreements containing the terms of these grants. Employees should be aware of the terms of their awards or the plans that govern those awards. When an employer breaches the terms of an employee's equity and stock grants, our attorneys work to negotiate an amicable resolution of the dispute, or pursue litigation or arbitration if necessary. If a tax specialist is required to explain the tax consequences of equity and stock grants, we have professionals available to ensure that our clients receive the best advice.
Employees may receive equity compensation for services performed. Equity compensation may be in the form of restricted stock, restricted stock units (RSUs), stock options, phantom stock, or stock appreciation rights, among others. Equity and stock compensation is generally treated as taxable income. Most equity compensation is subject to some form of vesting, meaning employees generally do not receive the award and cannot transfer it until they have worked for a specific period of time and/or they have met specific performance criteria.
Equity and stock grants are typically governed by a stock plan or an agreement describing the terms of the particular award. Vesting periods can be accelerated when certain trigger events occur, such as an initial public offering or sale of the company, or when an employee retires, dies, or is terminated without cause before the end of the vesting period.