Thus, if a stock option
agreement states that the options are nontransferable, a domestic relations order requiring the options to be transferred nonetheless will generally be unenforceable.
Only a little more than a year ago it seemed that stock options
were the quick path to riches.
are taxable for Dutch wage, social security, and personal income tax purposes when the employee can exercise the stock option
for the first time.
Even so, Keitel says, Black-Scholes was designed for derivatives that are short-dated, transferable and hedgeable--three adjectives that do not apply to employee stock option
71-52, the IRS determined that an employer did not make a payment of wages for purposes of assessing employment or income tax withholding at the time of the exercise of the qualified stock options
under former Sec.
Implicitly, the IRS also does not regard stock options
as "property" subject to nonrecognition under Sec.
44 became effective July 1, 2000, and, with some exceptions, will apply prospectively to new stock option
awards, exchanges and modifications and changes in status that occur on or after that date.
For growing companies, particularly those in the high-tech sector, stock options
present a way to offer workers an equity stake early in the company's history, allowing them to benefit from the company's growth and potential for stock appreciation.
Taxation of nonqualified stock options
(NQSOs) is governed by Sec.
Thus, granting options under nonemployer stock option
plans generally results in a charge to the company's earnings.