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.
Stock options 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 grants.
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.
