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E
Early-Exercise Stock Options

Options that are immediately exercisable but which typically do not start vesting until between six months and a year after grant. The underlying shares received at exercise are "restricted" and subject to a repurchase right by the company at the exercise price until they are vested. Early exercise starts the capital gains clock for a later resale. No gains are realized on the spread from the option exercise until vesting or until a Section 83(b) election is filed. This feature is becoming common in stock plans at pre-IPO companies and is sometimes called "reverse vesting." For details, see this website's section Pre-IPO: Early-Exercise Options.

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