Matt Dickstein

Business Attorney

Making legal matters easy and economical for your business.

39488 Stevenson Place, Suite 100, Fremont, CA 94539
510-796-9144. mattdickstein@hotmail.com mattdickstein.com

Matt Dickstein

Business Attorney

Making legal matters easy and economical for your business.

39488 Stevenson Place, Suite 100, Fremont, CA 94539 510-796-9144. mattdickstein@hotmail.com mattdickstein.com

Business Law

Attorney for Businesses, Corporations, LLCs

Stock Option Plans, Restricted Stock, Phantom Stock and Other Incentive Plans for Closely Held Businesses

Article #1 – Overview

This series of articles explains how restricted stock, stock options, cash plans, phantom stock and stock appreciation rights really work for closely held companies, and what their real value is for the company and the employee. This subject – how closely held companies use employee incentive plans (like stock option plans) – is a tricky subject that few people know anything about. But it’s important: at any one time I’ll have a bunch of these matters on my desk, and usually I’m fixing a bad situation.

The articles in the series are:

1. Overview     ◄You are here
2. Equity Plans – Stock Options and Restricted Stock
3. Stock Option Plans
4. Restricted Stock Plans
5. Company Buy-Back and Repurchase of Stock Options and Restricted Stock
6. Cash Plans, Phantom Stock Plans and Stock Appreciation Rights
7. Summary and Plan of Action

I will focus on closely held, small to mid-size businesses. This could be a pre-IPO startup company or a family business, it doesn’t matter. Further, I gear this series of articles to the business owner. The employee is not my intended audience, although these articles will be very useful to the employee who might take the stock option.

There are two general types of incentive plans available for you: cash plans and equity plans. In cash plans, you give cash to the employee. Usually you base the amount of cash given on the company’s performance, as for example, phantom stock plans and stock appreciation rights. If this is your preferred topic, go to article #6 – Cash Plans, Phantom Stock Plans and Stock Appreciation Rights.

The second general category of incentive plan is the equity plan, either stock options or restricted stock. Equity means stock or ownership, so with an equity plan you give ownership in the company to the employees. I will talk about equity plans first. Without further ado, please go to the next article in the series, Equity Plans – Stock Options and Restricted Stock for an overview of equity plans.

Shameless Plug

You should hire an attorney to help you with your employee incentive and stock option plans. The job must be done right – the risks are too high to do it wrong. If you want to read more try my main page, Business Lawyer. From there you can link to other pages and articles of interest.

Call me to schedule a legal consultation: 510-796-9144