American Brands, Inc. Incentive Stock Option Plan
Article Abstract:
Statutory stock options were reinstated by the Economic Recovery Tax Act of 1981 (ERTA). These options, as provided for in ERTA are known as Incentive Stock Options (ISO). In Section 422 of the Internal Revenue Code, ISO is defined, and the detailed requirements of ISO are set forth in subsection B, some of which resemble the old qualified stock option rules. The American Brands situation allows one million two hundred thousand shares of common stock to be optioned, but not more than one hundred thousand shares can be optioned as non-qualified to any single person. The purchase price must be at full market value. Total market value of stock optioned to a single employee in one year cannot exceed one hundred thousand dollars. Options cannot be given past October of 1986, but those given before can be extended. The plan's goal is to attract and keep important workers through an offering of proprietary interest. Definitions of important phrases in the plan are reviewed. The plan's administration, options granted and rights and options' exercise rules are assessed.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1983
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Proposed Class Exemption on Incentives to Establish IRAs and Keoghs
Article Abstract:
The Internal Revenue Service (IRS) proposed a class exemption for various deals wherein persons founded individual retirement accounts (IRA) or plans for self- employed persons. The exemption applies to various premiums or gifts in the course of such IRA deals. Both the IRS and the Department of Labor must move to protect IRA and Keogh plan users and their beneficiaries by controlling any exemptions for conflicting purposes of retirement funding. Exemption conditions provide that cash, property, and other considerations must be given only because of the participant's benefit. Fair market value for financial institutions cannot exceed ten dollars for IRA or Keogh deposits where the account is less than five thousand dollars. The legislative history of the class exemption is reviewed. It is suggested that the limits should include insurance coverage and retroactive exemption has been called for by the United States League of Savings Associations.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1983
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Model Selection 401(K) Plan
Article Abstract:
This plan is assumed to be effective at the onset of 1984. It is a matching profit sharing plan, using a salary reduction or cash or deferred arrangements according to Internal Revenue Code (IRC) Section 401(K) regulations. Both pre and post tax employee contributions are allowed. Each gets fifty percent matching funds from the employer, up to a three percent total of the employee's total compensation. After five years matching funds will have vested. The plan includes counting service on the elapsed time procedure and three investment selections over and above loan options and allocation of contributions between investment funds. A sample plan with fifteen articles of incorporation is featured.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1984
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