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 ?
2 continuously monitors the transactions and activities in human resources and stock option administration systems to ensure compliance in every step involved in the process for granting, executing and accounting for employee stock options.
In the exhibits, the option term is only four years--much shorter than the 10-year fife of a typical employee stock option.
Just as with public companies, the appraised value of a private company fluctuates over time, and this fluctuation, or volatility, is a key driver of stock option value.
The next-day deposit rule, TEI said, is nearly impossible for companies to comply with in the context of broker-assisted stock option exercises.
Unfortunately, many rank-and-file workers--and more than a few top executives--are blissfully ignorant of the perils of stock option ownership.
3) Thus, the grant of a stock option to an employee is generally treated as a non-event for tax purposes.
Despite the new stock option requirements and greater scrutiny by auditors, many stock plan administrators are still using patched together spreadsheet solutions that are woefully inadequate to meet today's regulatory challenges.
Notice 2001-14 clarifies the issue of the assessment and collection of FICA, FUTA and income tax withholding on statutory stock options, which include both incentive stock options (ISOs) and employee stock purchase plans (ESPPs), covered under Secs.
1041 protection and concluded that an employee who transfers stock options to a spouse as part of a divorce must recognize income immediately at the time of the transfer, even though no options are exercised.
44 not only defines employee but also clarifies the criteria for determining whether a plan qualifies as a noncompensatory plan, the accounting consequences of various modifications to the terms of a previously fixed stock option or award and the accounting for an exchange of stock compensation awards in a business combination.
In July 2006, the Company announced that the Audit Committee of its Board of Directors had self-initiated an internal review of the Company's stock option grant practices.