Assignment 5 Flashcards
1
Q
ISO
A
• Incentive Stock Options
• Available at employers discretion to only some employees, often only
HCE
• Term (duration) limited to 10 years
• Min. 2 year hold
• Option price must equal or exceed value of stock when granted
2
Q
Employee Stock Purchase Plan
A
• Option arrangements where full‐time
employees are allowed to buy stock in
employer’s corporation, often at a discount
3
Q
NQSO
A
- Nonqualified Stock Option
* More flexible than ISO
4
Q
Sec. 83(b) election
A
• Individual can elect within 30 days of a
transfer to include the fair market value of the
transferred property (stock) in his/her gross
income currently.
5
Q
Methods for exercising stock options
A
- Cashexercise
- Stock‐for‐stock exercise
- Cashless exercise
- Reload options
