How do the plans apply to restricted stock grants?
These plans are extremely important for use with restricted stock grants, whose restriction may lapse during a blackout window. In that case, the executive would receive the stock and the Form W-2 compensation without the ability to sell the stock until the next open window. This could be detrimental if the stock drops in value between the date of the lapse in restriction when the compensation element is determined and the actual sale of the stock. So we could set up a plan during an open window that would enable the executive to sell these shares the day the restriction lapses. Once the plan is drawn up with a broker-dealer and approved by corporate counsel, when the restriction lapses, the executive would be able to sell the shares at the current market value, equal to the compensation element. Are there any other considerations? Most companies will only allow SEC Rule 10b5-1 plans to be implemented during open window periods and, of course, when the executive does not have knowledge
