stock option

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stock option

n. the right to purchase stock in the future at a price set at the time the option is granted (by sale or as compensation by the corporation). To actually obtain the shares of stock the owner of the option must "exercise" the option by paying the agreed upon price and requesting issuance of the shares. (See: stock, share, option)

References in periodicals archive ?
Two executives from Brocade Communications have been indicted on criminal charges for securities fraud for possible manipulation of stock options, and the SEC has filed a civil complaint against the company.
The fair value method requires an issuer to recognize compensation for employee stock options as employees perform services to earn those options.
2002-22 previously concluded that a taxpayer who transfers interests in nonstatutory stock options and nonqualified deferred compensation to his or her former spouse incident to divorce need not include any gross income on the transfer.
Note: The IRS issued a Field Directive on March 14, 2003, which states that LMSB Employment Tax Specialists should not challenge the timeliness of employment and withholding tax deposits on the exercise of stock options if the deposits are made the next day after settlement date, as long as that date is within three days of the trade date.
The IRS could audit your gift tax return at time of transfer, and valuation of compensatory stock options has no real precedent in the tax law.
In December 2006, the company's board of directors created a special board committee of independent directors to conduct a voluntary review of past stock option practices at the company.
Are you rethinking the whole idea of offering stock options as an employee benefit?
ISOs and NQSOs are two types of commonly recognized stock options.
2002-22 and Notice 2002-3 1 apply to some deferred compensation arrangements as well, this discussion will be limited to their application to stock options.
In addition, while appreciating the extension of the period for optional reporting of compensation arising from the exercise of employer-provided nonqualified stock options, we believe that Announcements are an improper means through which to impose a mandatory wage-information reporting requirement.