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For more than four decades, Fenwick & West LLP has helped some of the world’s most recognized companies become, and remain, market leaders. From emerging enterprises to large public corporations, our clients are leaders in the technology, life sciences and cleantech sectors and are fundamentally changing the world through rapid innovation.  MORE >

Fenwick & West was founded in 1972 in the heart of Silicon Valley—before “Silicon Valley” existed—by four visionary lawyers who left a top-tier New York law firm to pursue their shared belief that technology would revolutionize the business world and to pioneer the legal work for those technological innovations. In order to be most effective, they decided they needed to move to a location close to primary research and technology development. These four attorneys opened their first office in downtown Palo Alto, and Fenwick became one of the first technology law firms in the world.  MORE >

From our founding in 1972, Fenwick has been committed to promoting diversity and inclusion both within our firm and throughout the legal profession. For almost four decades, the firm has actively promoted an open and inclusive work environment and committed significant resources towards improving our diversity efforts at every level.  MORE >

At Fenwick, we are proud of our commitment to the community and to our culture of making a difference in the lives of individuals and organizations in the communities where we live and work. We recognize that providing legal services is not only an essential part of our professional responsibility, but also an excellent opportunity for our attorneys to gain valuable practical experience, learn new areas of the law and contribute to the community.  MORE >

Year after year, Fenwick & West is honored for excellence in the legal profession. Many of our attorneys are recognized as leaders in their respective fields, and our Corporate, Tax, Litigation and Intellectual Property Practice Groups consistently receive top national and international rankings, including:

  • Named Technology Group of the Year by Law360
  • Ranked #1 in the Americas for number of technology deals in 2015 by Mergermarket
  • Nearly 20 percent of Fenwick partners are ranked by Chambers
  • Consistently ranked among the top 10 law firms in the U.S. for diversity
  • Recognized as having top mentoring and pro bono programs by Euromoney

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We take sustainability very seriously at Fenwick. Like many of our clients, we are adopting policies that reduce consumption and waste, and improve efficiency. By using technologies developed by a number of our cleantech clients, we are at the forefront of implementing sustainable policies and practices that minimize environmental impact. In fact, Fenwick has earned recognition in several areas as one of the top US law firms for implementing sustainable business practices.  MORE >

At Fenwick, we have a passion for excellence and innovation that mirrors our client base. Our firm is making revolutionary changes to the practice of law through substantial investments in proprietary technology tools and processes—allowing us to deliver best-in-class legal services more effectively.   MORE >

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Executive Compensation and Employee Benefits Alert: Property Transferred in Connection with the Performance of Services under Section 83

On February 26, 2014, the Internal Revenue Service released final regulations that have codified existing IRS interpretations regarding transfer of stock to service providers on or after January 1, 2013. (https://www.federalregister.gov/articles/2014/02/26/2014-03988/property-transferred-in-connection-with-the-performance-of-services-under-section-83).

Section 83 Generally

Section 83 generally taxes employees and other service providers on the spread value on property (such as stock) only at the time of vesting where the vesting condition constitutes a “substantial risk of forfeiture.” (An employee may elect within 30 days of transfer to make an election to disregard vesting and pay tax on any spread at the time of the election.)

Final Regulations – February 26, 2014

Service-Related Conditions or Conditions Related to the Purpose of the Property Transferred - In the final regulations, the IRS clarified that in evaluating whether property is subject to a substantial risk of forfeiture, the only events that will defer taxation are a service-related condition or a condition related to the purpose of the property transferred. In this context, the IRS stated that it will consider both (1) the likelihood that the forfeiture will occur and (2) the likelihood that the forfeiture will be enforced. This clarification is consistent with the IRS position that a substantial risk of forfeiture exists only if the facts and circumstances of an arrangement indicate that a risk of forfeiture is substantial pursuant to the terms of that arrangement and that there is a substantial likelihood that the terms of that arrangement will be enforced.

It is our view that the IRS’s clarification is intended to ensure that forfeiture provisions that the company does not intend to enforce will not be treated as a “substantial risk of forfeiture.” If the facts and circumstances indicate that the company intends to enforce the restriction, then it should be respected.  Thus, for example, if an employee has an agreement that provides full vesting upon termination other than for cause, the substantial risk of forfeiture should be given effect unless the company has a pattern of providing vesting upon termination even where the company has not terminated the employee other than for cause, i.e., where the employee simply goes to work for another employer.

Alternatively, if the forfeiture condition is based on the employee achieving a non-service condition related to the purpose of the transfer, such as the achievement of an economic result, this should be recognized as a valid substantial risk of forfeiture unless the facts and circumstances indicate that the economic result is substantially likely, or there is a substantial likelihood that the employee would be permitted to vest the stock even when the economic result is not attained.

Transfer Restrictions - The final regulations also address whether a “substantial risk of forfeiture” exists as a result of a transfer restriction imposed by (1) a lock-up agreement, (2) an insider trading policy, or (3) Section 16(b) of the Securities Exchange Act of 1934. The IRS clarified that a transfer restriction imposed by a lock-up agreement does not subject the property to a substantial risk of forfeiture, because the service provider's rights are not conditioned on continued services or the purpose of the property transfer. Similarly, the IRS clarified that neither an insider trading policy nor potential Rule 10b-5 liability would be sufficient to subject property to a substantial risk of forfeiture, because the insider trading policy and/or potential liability are not conditions of continued services or the purpose of the property transfer.

By contrast, the IRS confirmed that stock would be subject to a substantial risk of forfeiture for up to six months if the seller was subject to liability under Section 16(b), but only if the grant of the equity award is a non-exempt grant and disregarding a later. A subsequent equity award or transaction that could, because of its non-exempt status, extend the potential Section 16(b) liability period does not extend the substantial risk of forfeiture.

Effective Date - The final regulations are effective January 1, 2013.​