Dating of stock option

Again, while it is beyond the scope of this article, the tax treatment of stock and options is vastly different, and can lead to very different results for the holder at the time the option or stock is disposed of (such as in an acquisition of the company).If the advisor wants to exercise the option and acquire the stock, he or she can exercise the option and pay ,000 (or some lesser amount to only exercise a part of the option), and then become a stockholder.If you are fortunate enough to receive a restricted stock grant (often referenced as restricted stock units or RSUs) from your firm as a joining or retention incentive, you should understand the fundamentals of this benefit.The terms surrounding the vesting and pricing of this stock grant may impact your decision-making for tax planning as well as ongoing employment.That stock is probably subject to vesting tied to continuous service to the company, which in the case of stock is sometimes called “reverse vesting” because it gives the company the right to reacquire unvested stock if the service terminates (this is similar to how stock issued to founders and early stockholders is set up).

You do not need an “option pool” to issue stock and options from a corporate law perspective, but having an option pool set up gives you a framework for doing so in a more simple and efficient manner.Stock (typically Common Stockcommon stock) is the most basic and commonly understood form of equity.The recipient becomes a stockholder in the company just like founders and other stockholders, has voting rights (assuming he or she gets a form of stock that has voting rights) and is otherwise a full-fledged stockholder.People holding options are not stockholders, do not vote like stockholders, and are merely holders of a contractual right to acquire stock.The tax law requirements around setting the exercise price for an option is complex and beyond the scope of this article, but the most common practice is to set the exercise price to be equal to the fair market value of a share of the type of stock that is issued if the option is exercised.

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