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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    ERISA

Date & Time
  • event Date

    Tuesday, August 6, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

$347.00

This course is $0 with these passes:

CLE
ALL

This CLE course will guide attorneys and advisers on critical legal and tax considerations for granting profits interests to key employees and service providers. The panel will discuss critical issues regarding participation thresholds, vesting, repurchase rights, Section 83(b) election, rights of profits interest holders, financial reporting requirements, and other vital items essential to structuring an effective profits interest program.

Faculty

Joseph E. Hunt
Member
Morse Barnes-Brown & Pendleton, PC

Mr. Hunt has eight years of advisory and legal experience, counseling startup, emerging, and middle-market companies throughout all stages of the entity life cycle, including formation, tax structuring, issuing equity, venture capital financing, and mergers and acquisitions. His clients span a variety of different industries at all stages of corporate development, with a particular focus in serving technology and life sciences startup companies. Mr. Hunt is a member of the adjunct faculty at Boston University School of Law where he teaches in the Graduate Tax Program.

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Description

Profits interest incentive compensation arrangements present corporate and executive compensation counsel with complex design, structuring, and tax challenges. In addition, counsel must consider current tax law to effectively structure compensation for key executives and service providers and avoid unintended tax liability, both at the time of grant and on a go-forward basis.

Counsel must consider various issues stemming from profits interest arrangements, such as participation thresholds, waterfall provisions, vesting, repurchase rights, financial reporting requirements, and other vital items. IRS guidance is limited on many issues, including how Section 409A applies and when to make 83(b) elections.

Listen as our authoritative panel offers solutions and strategic approaches for structuring profits interest arrangements and avoiding common pitfalls that can lead to disastrous tax consequences.

Outline

  1. Profits interest vs. capital interest
  2. Options to acquire profits interests
  3. Phantom arrangements
  4. Income tax consequences, advantages, and disadvantages
  5. Design, structuring, and implementation considerations

Benefits

The panel will review these and other key issues:

  • How does a capital interest differ from a profit interest, and what tax ramifications result from the type of equity interest granted?
  • How does Section 409A apply?
  • How does the Section 83(b) election apply?
  • What issues arise for repurchase rights, vesting, and rights of the profits interest holder?
  • How to establish safe harbor thresholds
  • Financial reporting and valuation