Employee Ownership Blog

In Scully v. US WATS Inc. (3rd. Cir., No. 99-1590, 2/1/01), an executive, Mark Scully, argued that the options he was given at the time he was fired should have been valued effective as of the date the options were to expire, not when he was terminated.

The Arizona Securities Division has denied a request for a no-action letter from World Internet Holdings, Inc. on its stock option plan. The company was seeking an exemption for the plan from securities registration requirements.

Qualcomm has settled a lawsuit with former employees whose division was sold to Ericsson. The employees contended that the terms of the sale failed to provide them with all the benefits their option plan had promised. The settlement will provide 840 employees with $11 million.

In Private Letter Ruling 200052023, the Internal Revenue Service (IRS) ruled on a merger between two ESOP companies. The target company was owned partly by an ESOP and an individual shareholder; the acquiring company was a 100% ESOP.

In PLR 200052014, the IRS ruled that owners of a company listed on the over-the-counter market can sell to their company ESOP and take Section 1042 rollover treatment on the sale because the over the counter market does not provide sufficient trading volume to make a stock readily tradable.

The Securities and Exchange Commission has issued new guidance stating that if a company allows employees with options to turn in shares obtained through the exercise of stock options in exchange for new options, then this will trigger variable accounting procedures.

Some expenses of ERISA plans, including ESOPs and 401(k) plans, can be paid for by the plan. In Advisory Opinion 2001-01A, the Pension Welfare Benefit Administration (PWBA) has issued new guidance on when the plan can pay for various tax qualification and other plan functions.

A company's Section 423 employee stock purchase plan allows employees to purchase shares at a 15% discount at either the end or the beginning of its offering period.

Under pressure from the SEC, the NYSE and the NASDAQ are considering changes in their current rules for shareholder approval of option grants.

Under a new law passed in the Netherlands, previously one of the most option-unfriendly tax jursidictions, employees can choose to have their options taxed on grant or on the spread at exercise.

The Bureau of Labor Statistics has started to ask employers if they offer stock options in its annual survey of medium to large-sized employers.

The SEC is proposing regulations for public companies that would require at least annual disclosure about the total number of securities that have "been authorized for issuance under equity compensation plans in effect as of the end of the last completed fiscal year, whether or not the plans have