20-171D 20-171D . . . Restricted Stock Plan under which a committee of Board of Directors sells shares of common stock to certain officers and senior employees at a price substantially below current market price. The shares are subject to following restrictions: (a) prohibition against any sale or other transfer and (b) obligation that participant (at corporation's option) must resell shares to corporation at price he paid for them if he ceases to be employed by corporation prior to expiration of from five to nine years after shares were sold to him, for reasons other than normal retirement, death, total disability or early retirement with consent of Board or committee. Except as otherwise provided, restrictions lapse as to 1/5 of aggregate number of participant's shares at expiration or each of fifth through ninth years after his purchase of such shares
Alabama Restricted Stock Plan of Sundstrand Corp.
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How to fill out Restricted Stock Plan Of Sundstrand Corp.?
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FAQ
The accounting for restricted stock awards can be quite technical. For example, if actual shares are delivered to the employee, then journal entries would impact equity. If the value of the shares is paid in cash, then the company would most likely record a liability.
Answers. Accounting for restricted stock units (RSU's) is very similar to accounting for stock options. The major difference is that valuation is generally much simpler for RSU's, since for non-dividend paying stocks, the RSU is worth the fair value of the underlying stock?no complex option pricing model necessary.
Here's an example. Say you've been granted 1,500 RSUs and the vesting schedule is 20% after one year of service, and then equal quarterly installments thereafter for the next three years. This would mean that after staying with your company for a year, 300 shares would vest and become yours.
Since stock you receive through stock grants and RSUs is essentially compensation, you'll usually see it reported automatically on your W-2. Typically, income taxes are withheld to go against what you might owe when you do your taxes.
What are the income tax implications of an RSA? Under normal federal income tax rules, you are not taxed at the time of a restricted stock award, assuming you have made no election under Section 83(b). Instead, you are taxed at vesting, when the restrictions lapse.
Restricted stock units give employees interest in their employer's equity but have no tangible value until they are vested. The RSUs are assigned a fair market value (FMV) when they vest. Restricted stock units are considered income once vested, and a portion of the shares is withheld to pay income taxes.