Now released as a second edition, The Power of Restricted Stock details the various tax, accounting and legal issues involved with one of the most proven compensation vehicles in todayís complex corporate environment.

Two years after the release of the first edition in 2004, this completely updated volume addresses the implications of recent actions taken by the Financial Accounting Standards Board, the Internal Revenue Service and the Securities and Exchange Commission.

The new content specifically addresses:

• Final fair-value accounting rules mandating that companies expense the cost of stock options
• Guidance on the deferred compensation provisions of the American Jobs Creation Act of 2004
• A long-awaited FAQ on Form 8-K 'real-time' disclosure rules, which mandate more timely filings of 8-Ks for changes in compensation-related matters.

This book is aimed at helping boards of directors, corporate officers, stock analysts, private business owners and consultants who want to be armed with the right answers and have a better understanding of restricted stock awards and restricted stock units.

Table of Contents

Introduction: Restricted Stock Awards — “There’s Been a Whole Lotta Shakin’ Going On”

Chapter 1: Restricted Stock Awards (RSAs)
• What Are Restricted Stock Awards?
• Why Offer Restricted Stock Awards?
• Prevalence of Plans
• Purpose, Eligibility and Vesting
• Advantages vs. Disadvantages

Chapter 2: The Time Is Right
• History of Restricted Stock Awards
• Unprecedented Times and Reasons for Granting Restricted Stock Awards
   - Stock Option Expensing
   - The Power of Restricted Stock
   - A History
   - Volatile Markets
   - Dividend Environment
   - Shareholders and Dilution
   - Underwater Stock Options
   - Retention of Key Talent

Chapter 3: Drafting in the Peloton of Other Companies
• Key Companies Using Restricted Stock
• Case Study: Revisiting Microsoft Two Years Later
• Microsoft’s Plan
• Steps for Creating Value
• Is Your Company Ready?
• Summary

Chapter 4: Restricted Stock vs. Other Long-Term Incentives
• Influences on Choosing Option Alternatives
• The Contenders
   - Options
   - Performance Plans
   - Performance Unit Plans
• Appreciation/Equity-Equivalent Plans
   - Phantom Stock
   - Stock Appreciation Rights
• Other Contenders
• Three True Contenders: Performance Shares, Nonqualified Deferred Compensation and Stock-Settled SARS
• Performance Shares
• Nonqualified Deferred Compensation Plans
• Stock-Settled SARS
• Summary

Chapter 5: The Investment Required
• Are Restricted Stock Plans Worth the Cost?
• Economic Costs
• Implementation Costs
• Opportunity Costs
• Communication Costs
• Administration Costs
• Structural Considerations

Chapter 6: Restricted Stock with a Twist
• Restricted Stock Units (RSUs)
• Performance-Accelerated Restricted Stock
• Founders Stock
• Deferrals into Restricted Stock
• Summary

Chapter 7: Getting Technical
• Tax Considerations
   - Employee
   - 83(b) Election
   - Company
• Accounting Considerations
   - Vesting
   - Dilution
   - Forfeiture
   - Booking
   - Performance Issues
   - Stock Option Cancellations
   - The Future
• Legal Requirements
   - Employee
   - Employer
• ERISA Considerations
• Summary
• Endnotes

Chapter 8: Final Considerations
• Designing the RSA Plan
• Record Keeping: Measuring for Accuracy
• Reporting
• How Does All This Get Done?
• Outsourcing as an Option
• Communication
• Risks and Rewards
• Electronic Communications
• The Importance of Getting it Right
• Plan, Review and Audit
• Executive Perceptions
• Summary

Appendix
• Frequently Asked Questions
• Sample Forms

Glossary

Selected References