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Introducing SOS Xtra
Welcome to the inaugural edition of SOS Xtra, an electronic newsletter from Stock & Option Solutions (SOS).
You’ll find industry articles, information on upcoming webcasts, product spotlights and even links to market
research surveys.
Please feel free to forward this newsletter on to others who might be interested in the content.
You can join the SOS Xtra mailing list by clicking here.
FREE Webinar on Performance Grants on August 20th — RSVP Today!
Follow this link to register for our next webinar,
Perfecting Performance Plans: Prominent Practices and Painful Pitfalls.
Please mark your calendar and join us for our next free webinar on Wednesday, August 20, @ 11:00 AM PT.
This webinar is co-sponsored by BNY Mellon Shareowner Services.
Elizabeth Dodge, CEP, VP Product Management for Stock & Option Solutions, and Maria Acevedo,
VP Product Management for BNY Mellon Shareowner Services, will share market data on current
practices and their insights on performance shares today, the pros, the perks, the problems and the pitfalls.
(One hour of CEP continuing education credit is available for attending.)
And stay tuned for our next free webinar on Section 6039, currently planned for Wednesday, September 17th at 11am PT.
New Proposed Regulations on IRC Section 6039
For those of you who grant ISOs or have section 423-qualified ESPP plans, on July 17, 2008
the IRS released a notice of proposed rulemaking relating to Information Reporting Requirements of Section 6039.
This proposed guidance clarifies (and expands!) the new reporting requirement of Section 6039 (mandated by the Tax Relief and Healthcare Act of 2006.)
Issuing firms have been required to report the effect of ISO exercises and ESPP transfers to participant under these requirements for years, but will need to begin reporting to the IRS beginning with transactions that occur in 2009. These proposed rules not only define the information that will need to be provided to the IRS and the timing of the reporting, they also expand the existing Section 6039 participant reporting requirements for ESPPs to include all of the information necessary for participants to compute their income tax (new elements include items such as market value on enrollment date).
The proposed rulemaking notice does exempt transactions for the calendar years 2007 and 2008, so reporting will not begin for some time. However, the following bullets summarize the contents of the release:
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o Transactions occurring in 2007 and 2008 are exempt from
the revised requirements
o ESPP disclosures have been expanded to include:
– Enrollment date (“date the option was granted”)
– Enrollment date market value (“fair market value of the stock on
the date the option was granted”)
– Purchase price (“exercise price per share”)
– Purchase date (“date the option was exercised”)
– Purchase date market value (“fair market value of the stock on
the date the option was exercised by the transferor”)
o Returns must be filed with the IRS on Forms 3921 (for ISOs)
and 3922 (for ESPPs), which the IRS expects to
release later this year
o For transactions after January 1, 2009, these forms must
also be used to report the information to employees
o Reporting must be completed by January 31 in the year
following the calendar year in which the transaction
occurred
o Comments on the proposed requirements are due to the
IRS by October 15, 2008.
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Market Research Survey: Complete, and Win!
Periodically SOS will ask for your participation in a market research survey to enhance our
understanding of current practices and trends in the industry and to provide our clients insight into the
prevalent practices of other issuing firms. Our surveys are brief – taking about 5-10 minutes to complete –
and everyone who completes the survey will receive a copy of the results and be entered to win a drawing for one of three $25 gift cards.
Complete the quick online survey today.
Product Spotlight: Strategic Solutions
Did you know that SOS offers Strategic Solutions to enhance the management of your equity
programs? Most companies know us for our onsite placement of highly-skilled stock plans personnel,
but we can provide advisory input for goals planning as well. Our popular Analysis & Recommendations
services provide an independent evaluation of your current stock plan policies and practices and recommends
ways to address your specific challenges. In particular, we look at process efficiencies, data integrity,
plan compliance, and risk management to identify areas of opportunity. Often these projects are tailored to
focus on specific concerns, such as an upcoming RSU release or automation of data interfaces. Clients have used
the results of our reviews to prioritize objectives, obtain management approval to implement corrective and preventative
solutions, and minimize exposure in an increasingly vigilant world. SOS Strategic Solutions can also provide
leadership or support for vendor evaluations (software, outsourcing, brokerage, transfer agent), education and
training for corporate administrators and plan participants, and administrative guidance for global equity plans. More Information
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