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Proposal to approve restricted stock plan

Proposal to approve restricted stock plan

Name: Proposal to approve restricted stock plan
Brand: US Legal Forms
Price: 59.00 USD
Rating: 4.76 (397 reviews)

Category:

Corporations - Public - Incentive Compensation Plans

State:

Multi-State

Control #:

US-CC-20-168-NE

Format:

Instant download

Description

This sample form, a detailed Proposal to Approve Restricted Stock Plan document, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.

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How to fill out Proposal To Approve Restricted Stock Plan?

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FAQ

The details of RSU accounting are beyond the scope of this brief discussion, but, in general, RSUs that can be settled only in shares receive accounting treatment similar to restricted stock. The fair value of the award, based on the stock price at the time of the grant, is expensed over the service period.

When you receive an RSU, you don't have any immediate tax liability. You only have to pay taxes when your RSU vests and you receive an actual payout of stock shares. At that point, you have to report income based on the fair market value of the stock.

A Restricted Stock Plan is a common way to share stock with employees in public companies.Customarily, restricted stock will carry a vesting schedule so that employees will forfeit some or all of the shares unless they remain with the company for a specified number of years (e.g. 3 or 4).

So that's the basic accounting for restricted stock under GAAP. The key takeaways are:The value recognized for each restricted share is the same as its current share price (for non-dividend paying stock). Restricted stock is recognized on the income statement over the service period.

Restricted shares are shares that are already included in the number of outstanding shares.Typically, these shares are owned by insiders such as employees and initial investors.

The Company's board of directors must approve all stock option grants, including the name of the recipient, the number of shares, the vesting schedule and the exercise price. This can be done either in a board meeting or via unanimous written consent.

Appointment of auditors (if there are any) Appointment or re-appointment of directors. Removal of a director or the auditor. Adoption of the annual accounts and the reports of the directors and auditors. Declaration of dividends.

Fulfill the SEC holding period requirements. From the date the shares are fully paid for, you must hold them at least six months. Comply with federal reporting requirements. Check trading volume. Remove the stock legend. Conduct an ordinary brokerage transaction. File required notices with the SEC.

RSUs give an employee interest in company stock but they have no tangible value until vesting is complete.Upon vesting, they are considered income, and a portion of the shares is withheld to pay income taxes. The employee receives the remaining shares and can sell them at their discretion.

Proposal to approve restricted stock plan

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