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(book cover)Includes CD

Beyond Stock Options

Phantom Stock, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, and Other Equity Alternatives

Eighth Edition

by Joseph S. Adams, Barbara Baksa, Daniel D. Coleman, Daniel Janich, David R. Johanson, Blair Jones, Kay Kemp, Scott Rodrick, Corey Rosen, Martin Staubus, and Robin Struve

$35.00 for NCEO members; $50.00 for nonmembers

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In today's world, stock options are still important, but other equity compensation plans are rapidly assuming greater importance. Companies such as Amazon.com and Microsoft are moving from stock options to restricted stock, and still other companies both large and small are doing more with phantom stock, stock appreciation rights, or direct stock purchases. This book/CD combination is an essential toolkit for everyone who needs to research or implement such a strategy. The book includes eight chapters on what the plan alternatives are, how they work, how to combine them, and the legal and accounting issues they raise. The authors include leading authorities from law firms, Deloitte & Touche, NASPP, and the NCEO. The book also includes a set of model plan documents, most of them annotated, prepared by law firms. The plan documents are included in word processing formats (Microsoft Word and Rich Text Format) on the CD that comes with the book, so you can open and edit them.

In the eighth edition, most of the chapters have been revised (as of late 2009) to account for new developments and to explain various matters in greater detail. Chapters 2, 3, 4, and 6 were changed the most, while chapters 7 and 8 had minor revisions, and chapters 1 and 5 did not need revisions and remain the same as in the seventh edition. Among the model plans, the phantom stock, SAR, restricted stock unit, and performance unit plans were revised; the other model plans did not need revisions and remain the same as in the seventh edition.

Publication Details

Format: Perfect-bound book, 376 pages
Includes CD
Edition: Eighth edition (February 2010)
Status: In stock

Contents

Introduction
Basic Issues in Plan Design
Phantom Stock and Stock Appreciation Rights
Restricted Stock Awards, Units, and Purchases
Performance Award Plans
Direct Stock Purchases in Closely Held Companies
Accounting Issues
ESOPs, ESPPs, 401(k) Plans, and Stock Options: When the Old Standbys Still Make Sense
A Tiered Approach to Equity Design with Multiple Equity Compensation Vehicles
Appendixes:
A. Using the Model Plan Documents
B-1. Omnibus Incentive Plan
B-2. Phantom Stock Grant Notice and Agreement
B-3. Stock Appreciation Rights Award (Cash-Settled)
B-4. Stock Appreciation Rights Award (Stock-Settled)
B-5. Restricted Stock Award and Acknowledgement
B-6. Restricted Stock Unit Grant Notice and Agreement
B-7. Performance Unit Award and Acknowledgement
C. Direct Stock Purchase Plan Documents
Index
About the Authors

Excerpts

From Chapter 2, "Phantom Stock and Stock Appreciation Rights"

If the employer's principal objective is to motivate the participants in the program to grow the value of the business, a SAR grant is typically more appropriate. The holder of a SAR award receives no benefit unless the underlying stock value appreciates. As a result, the holder has an incentive to improve financial performance with the expectation of growing the stock value. SAR grants are frequently made subject to a vesting schedule to encourage retention, as well as to provide an incentive to grow value. However, the vesting element of a SAR grant is successful as a retention tool only to the extent that the value of the underlying stock continues to appreciate. If the underlying stock declines in value from the date of grant so that the SARs have no value, the employee might be more willing to entertain an offer to go elsewhere because he or she forfeits no value upon departure. For example, assume an employer makes annual SAR grants with a graded five-year vesting schedule for each grant. Assume further that the underlying stock value appreciates each year during the first four years from $10 to $15, $20, $25, and then $30. If, at the end of five years, the underlying stock is valued at $40 per share, the employee would have a significant unvested build-up of the early awards. In this case, the annual SAR grants, with their five-year graded vesting schedules, become a valuable retention device. If, however, the underlying stock is more volatile and the value at the end of five years, based on the prior example, drops to $20, the retention value is more limited.