Granting Equity to Employees in Lieu of Cash

Due to the current economic downturn and a resultant reduction of cash flow in many businesses, numerous companies are seeking creative ways to incentivize and compensate employees. Companies often promise to issue stock or other forms of equity to employees in order to give them a “piece of the upside” associated with the value of the business. However, granting equity often has implications that companies frequently fail to consider.

Please join us for a Foley Executive Briefing Series program that will provide an overview of the various issues and alternatives that companies should consider before making employee equity grants.

Topics to be addressed include:

• How much equity should an employee receive?
  
• Should an employee be granted stock or options?
  
• What does the concept of “employee vesting” mean?
  
• How are vesting schedules used to protect the employer?
  
• What happens when the employee leaves the company or the company is sold?
  
• What special rights will the employee have as a stockholder of the company under corporate law?
  
• Which securities law considerations do companies need to consider?
  
• What are the special considerations applicable to equity grants in limited liability companies and S-corporations?
  
• What are the tax considerations applicable to the employee grant?

These and other issues will be addressed in an informal, interactive session led by Curt P. Creely, Foley Transactional & Securities and Private Equity & Venture Capital Partner, and Marina A. Choundas, Foley Tax & Individual Planning Special Counsel.

Granting Equity to Employees in Lieu of Cash is part of the Foley Executive Briefing Series. Learn more about upcoming programs in the series at Foley.com/FEBS.