Stock Option Agreement Early Exercise

Ultimately, such an ISO exercise may lead to more advantageous tax treatment than the election provided for in section 83(i) if the shares are held for all ISO holding periods. And as with any option, paying the exercise price is itself an investment risk, and a deferred tax year does not make the exercise risk-free. There can be significant tax differences between the early exercise of an ISO and an NSO. Option holders should consult their personal tax advisors for more information. Some companies save their options from the $1 million problem of stock options by granting stock options with a total term of 10 years that do not expire prematurely in the event of termination. The law does not require an early expiry period for stock options. .

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