Divorce and Division of Stock Options and Restricted Stock Units: Identifying, Classifying and Valuing Options and RSUs for Equitable Distribution and/or Income Availability

A live 90-minute CLE webinar with interactive Q&A


Thursday, August 31, 2017 (in 10 days)
1:00pm-2:30pm EDT, 10:00am-11:30am PDT


This CLE webinar will prepare family law practitioners and financial experts to better represent litigants in identifying, classifying and valuing stock options and restricted stock units (RSUs) for purposes of both equitable distribution and income availability upon divorce or in the context of post-judgment modification.

Description

Addressing stock option issues in a divorce setting often challenges divorce counsel to identify aspects of the option as vested or unvested, the option’s express terms, and whether the option is the result of marital effort, awarded for work performed that can be linked to the efforts of both spouses during the marriage.

The attorney and financial expert must determine whether a particular stock option can be characterized as a marital asset or income in the context of a divorce or post-judgment litigation. Once such a determination is made, the practitioner should be fully versed in the valuation of that stock option.

Such specified valuation provides the practitioner with even more challenges as several different valuation methods exist, all of which may be applied depending on the particular facts and circumstances presented.

Listen as our panel, comprised of a family law attorney and a financial expert, discusses and explains the different types of stock options and RSUs, the identification, consideration and distribution of these stock options and RSUs in the matrimonial context, and the appropriate valuation methods for such stock options in the divorce and post-divorce context. The panel will identify gray areas where specific attention to the details surrounding the nature and purpose of the stock option need to be carefully analyzed in order to avoid inappropriate distribution or inaccurate assumptions regarding pre-marital, marital or post-marital assets and income.

Outline

  1. Accounting/tax issues
    1. Overview of employee stock options
      1. ISO vs. NQSOs
      2. RSUs
      3. Tax implications
    2. Valuation issues
      1. Intrinsic value
      2. Mathematically derived values
    3. Matrimonial/legal issues
      1. Case law history
      2. Deferred distribution methods
      3. Present valuation with offset
      4. Value used for support
      5. Defining if an option is subject to distribution
      6. Recent developments
    4. Case law
    5. Distribution (two-step process)
      1. Determine the “marital portion” subject to equitable distribution
        1. Distribute vested options only
        2. Present evidence of why options were awarded in order to determine if earned income “during the marriage” or “through marital efforts”
        3. Coverture fraction/time rule
      2. Method of distribution of “marital portion”
        1. Valuation and offset
      3. Intrinsic value
      4. Black-Scholes method of valuation
        1. In-kind distribution
        2. Transfer of title
        3. Trust device
    6. Stock options as income for support
      1. Previously distributed options
      2. Existing, but undistributed options
      3. Projection of future income from past awards
    7. Other issues to consider
      1. Options to be expensed by corporations
      2. Sarbanes-Oxley Act of 2002
      3. Revenue Ruling 2002-22

Benefits

The panel will review these and other key issues:

  • What is the difference between a vested and unvested stock option?
  • How are different stock options identified?
  • What “time rules” are used in various venues?
  • What different valuation methods can be applied to value a stock option, and under what specific circumstances should the different valuation methods be applied?
  • When should stock options be considered as marital assets subject to equitable distribution, and under what circumstances can and/or should stock options be considered income?
  • How does one equitably distribute a stock option?
  • What challenges do RSUs present that are different than stock options?

Faculty

Charles F. Vuotto, Jr., Of Counsel
Starr Gern Davison & Rubin, Roseland, N.J.

Mr. Vuotto's practice focuses on family law. He is a Fellow of the American Academy of Matrimonial Lawyers and Past Chair of the Family Law Section of the New Jersey State Bar Association. He is a frequent lecturer at both family law and CPA conferences and seminars. He is the Editor-in-Chief of the New Jersey Family Lawyer as well as a published author on a variety of family law topics.

Neil Beaton, Managing Director
Alvarez & Marsal, Seattle

Mr. Beaton specializes in the valuation of public and privately held businesses and intangible assets for purposes of litigation support, particularly in the valuation of early-stage, venture-backed companies. He also performs valuations for employee-owned companies and municipal, state and federal entities. He writes and speaks frequently on valuation techniques for companies with capital structures.


Live Webinar

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This webinar is eligible for at least 1.5 general CLE credits.

CLE credits are not available for PR.

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Recordings

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Customer Reviews

I liked the format, the scope of the presentation and the depth of the presenters' knowledge of the subject.

Abigail Rivenbark

Erb & Suenram

The knowledge of the speaker was outstanding.

Natalie Camacho Mendoza

Camacho Mendoza Coulter Law Goup

There was a tremendous amount of information presented in a very limited time period and the outline of topics was very well organized.

Jonathan Hally

Clark and Feeney

The speakers did an excellent job of using practical tips and examples.

Maggie Simoneaux

Stegmeier, Gelbart, Schwartz & Benavente

The information provided was useful, and opened my eyes to potential issues I did not see previously.

Tara Mager

Malman Law Firm

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Family Law Advisory Board

Gunnar J. Gitlin

Attorney

The Gitlin Law Firm

Lynne Z. Gold-Bikin

Partner

Weber Gallagher Simpson Stapleton Fires & Newby

Randall M. Kessler

Founding Partner

Kessler & Solomiany

Paula G. Kirby

Paula G. Kirby PLC

Christopher C. Melcher

Partner

Walzer & Melcher

Julia Swain

Partner

Fox Rothschild

Charles F. Vuotto, Jr.

Of Counsel

Starr, Gern, Davison & Rubin

or call 1-800-926-7926

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