How is restricted stock reported?

Since stock you receive through stock grants and RSUs is essentially compensation, you'll usually see it reported automatically on your W-2. Typically, taxes are withheld to go against what you might owe when you do your taxes.

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Restricted Stock Plan of Sundstrand Corp.

Montgomery Maryland Restricted Stock Plan of Sundstrand Corp.

Name: Montgomery Maryland Restricted Stock Plan of Sundstrand Corp.
Brand: US Legal Forms
Rating: 4.84 (405 reviews)

Category:

Corporations - Public - Incentive Compensation Plans

State:

Multi-State

County:

Montgomery

Control #:

US-CC-20-171D

Format:

Instant download

Description

20-171D 20-171D . . . Restricted Stock Plan under which a committee of Board of Directors sells shares of common stock to certain officers and senior employees at a price substantially below current market price. The shares are subject to following restrictions: (a) prohibition against any sale or other transfer and (b) obligation that participant (at corporation's option) must resell shares to corporation at price he paid for them if he ceases to be employed by corporation prior to expiration of from five to nine years after shares were sold to him, for reasons other than normal retirement, death, total disability or early retirement with consent of Board or committee. Except as otherwise provided, restrictions lapse as to 1/5 of aggregate number of participant's shares at expiration or each of fifth through ninth years after his purchase of such shares

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RSUs are appealing because if the company performs well and the share price takes off, employees can receive a significant financial benefit. This can motivate employees to take ownership. Since employees need to satisfy vesting requirements, RSUs encourage them to stay for the long term and can improve retention.

The advantages of restricted stock bonus/purchase plans are (1) the employee can make the §83(b) election; (2) the employee is generally entitled to capital gain treatment on sale of vested stock; and (3) the Company gets a wage deduction without paying cash wages.

Restricted stock units are a way an employer can grant company shares to employees. The grant is "restricted" because it is subject to a vesting schedule, which can be based on length of employment or on performance goals, and because it is governed by other limits on transfers or sales that your company can impose.

As an example, if an employee is awarded 1000 RSUs at the time of her employment, and those RSUs become vested after five years, the value of those RSUs at the time they are vested is as follows: Stock Value = $20 per share. RSU Value (when vested) = $20 per share. Taxable income (when vested): $20 x 1000 = $20,000.

The value of RSUs is typically recorded in Box 14 of the W-2, which is labeled "Other." Box 14 doesn't have a standard list of codes, thus allowing employers to enter any description they like. You might see the value of your vested stock followed by "RSU."

Since stock you receive through stock grants and RSUs is essentially compensation, you'll usually see it reported automatically on your W-2. Typically, taxes are withheld to go against what you might owe when you do your taxes.

Restricted stock units are issued to employees through a vesting plan and distribution schedule after they achieve required performance milestones or upon remaining with their employer for a particular length of time. RSUs give employees interest in company stock but no tangible value until vesting is complete.

Holding Period. If the issuer of the securities is not subject to the reporting requirements, then you must hold the securities for at least one year. The relevant holding period begins when the securities were bought and fully paid for.

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Lilium N.V.. Up to 201,805,118 Class A Shares Up to 27,729,889 Class A Shares Issuable Upon Exercise of Warrants and Options Up to 7,060,000 Warrants. Share Withholding: The value of the stock at vesting will be reported on your W-2 in the year when the shares are delivered to you., economics and governance) to fill out the picture.

Montgomery Maryland Restricted Stock Plan of Sundstrand Corp.

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