schedule: 0-2 years, 0%; 2 years, 15%; 3 years, 35%; 4 years, 65%; 5 years, 100%.
Using the same scenario, here are the additional assumptions necessary to value the option under the FASB's new standard: expected option life of four years, which is the average time from grant to exercise; volatility of 30 percent; dividend yield of 1.5 percent; forfeitures of 4 percent per year; vesting
period of two years; and risk-free interest rate of 6.5 percent.
Nevertheless, recognizing expected forfeitures only addresses part of the impact of vesting
restrictions on the Black-Scholes value of an option.
The accounting literature does not consider time-related vesting
to create variability in the number of shares that an employee can receive, and performance-based acceleration does not affect the number of shares; it only affects the timing of the exercise.
Has anybody promised the equivalent of vesting
even though it's not legally required?
* How certain is Harry that he will be able to meet the conditions for vesting
Whether or not the plan is funded, ERISA's participation and vesting
standards do not apply.
In addition, the company awarded a restricted stock unit to one new non-executive employee, representing the right to receive up to 40,500 shares of its common stock, with 1/4th of the shares subject to the award vesting
on each anniversary of the grant date, subject to the employee's continuous service through each vesting
Although ERISA contains a strict vesting
requirement for pension benefits, it expressly exempts employee welfare benefit plans from that requirement.
The company said that these inducement grants, consisting of restricted stock unit awards with the right to receive up to 141,824 shares of its common stock, will vest over three years with 33% of the underlying shares vesting
on each of the first, second and third anniversaries of the vesting
The IRS reasoned that the postponement of the shares' vesting
dates did not cause them to become transferable, nor did it free the employee from the obligation to provide future services.
A newsletter issued by the IRS's Dallas Key District Office warns plan administrators of two plan practices that may result in violations of the plan qualification rules: (1) disregarding years of service in which an employee does not make elective deferral in determining the vesting
of matching contributions in a Sec.