Zynga, Facebook to Charge Employees to Sell Shares

Facebook and Zynga have both announced that they will charge employees substantial fees to sell their shares on secondary markets that have developed to buy stock in private companies.

Creating a "Sinking Fund" in an ESOP to Fund Repurchase Obligations

One of the ways to fund ESOP repurchase obligations is to create a "sinking fund" in the ESOP. This involves making contributions to the ESOP that are greater than what is needed on a current basis for distributions, thereby creating a fund that can be used to meet future liquidity needs.

Determining the Cost Basis of S Corporation Shares

As I mentioned in my last column, the status of the ESOP plan sponsor as an S corporation can trigger different consequences for the participants in such ESOP than if the plan sponsor were a C corporation.

Distributions to Former Participants in Company Stock

I recently wrote here on the subject of tracking the cost basis of shares owned by an ESOP. The determination of cost basis is relevant when a distribution is made from the ESOP to a former participant in the form of shares of company stock.

ESOP Rules for Government Contractors Finalized

The Cost Accounting Standards Board (CASB) issued a final ruling in May 2008 that applies to federal government contractors who sponsor ESOPs. The effective date of 48 CFR Part 9904 was June 2, 2008. It amends CAS 412 and 415.