Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Matrimonial StrategistLJN NewslettersNewsSections

The Marital Estate: Stock Options and Restricted Stock

By Edward R. Skone
November 30, 2003

Stock options became a large part of many marital estates involved in marriage dissolution during the “bubble” of the late 1990s. As one would expect, the courts struggled with the issues this new situation presented, primarily what options were to be included in the marital estate. The following possible scenarios indicate the complexities:

  • Stock options received prior to marriage and vesting during marriage;
  • Stock options granted prior to marriage and vesting during marriage;
  • Stock options granted during marriage and vesting during marriage;
  • Stock options granted during marriage and vesting after marriage.

Other complicating factors created more issues. Courts were faced with situations where non-marital property was used to pay the strike price on community options. Most stock plans do not allow the non-employee spouse to own stock options. Consequently, terms of beneficial ownership of the options by the employee-spouse for the other spouse had to be created. Some stock options were granted as a reward for services performed in the past and in part to retain the employee in the future. This further complicated the determination of whether or not the stock options were marital property.

Stock options and restricted stock have been a part of executive compensation for many years. However, it was not until the late 1980s, with the mushrooming of new companies in the technical computer and science industries, that these forms of compensation, primarily stock options, became popular and available to a broad range of employees, not just senior executives.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office Image

A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.

New York's Latest Cybersecurity Commitment Image

On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.

Bit Parts Image

Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights

Risks of “Baseball Arbitration” in Resolving Real Estate Disputes Image

“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.

Disconnect Between In-House and Outside Counsel Image

'Disconnect Between In-House and Outside Counsel is a continuation of the discussion of client expectations and the disconnect that often occurs. And although the outside attorneys should be pursuing how inside-counsel actually think, inside counsel should make an effort to impart this information without waiting to be asked.