General Homepage About Us Site Tour Sign In Register myAccount Corporate Customization Licensing Sponsorships User Agreement Privacy Tools myTools Quick-Take Calculator for Stock Options Quick-Take Calculator for SARs Quick-Take Calculator for Restricted Stock I Need The Money myRecords Comparison Modeling Tool Quizzes Basics Of Stock Grants Stock Options Taxes Restricted Stock & Restricted Stock Units Employee Stock Purchase Plans Stock Appreciation Rights Insider Trading CFP® Credit Tax Center Glossary Discussion myLibrary Ask The Experts Global Tax Australia Belgium Brazil Canada Chile China UPDATED! Colombia Denmark France UPDATED! Germany Hong Kong India UPDATED! Ireland Israel Italy Japan Malaysia Mexico Netherlands New Zealand Norway Singapore Spain Sweden Switzerland Taiwan UK UPDATED! US Venezuela Newsletters REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED October, November, and December 2007 Year-End Strategies For Stock Options & Restricted Stock: myStockOptions.com Update No. 33 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED July, August, and September 2007 College Funding With Stock Compensation: myStockOptions.com Update No. 32 Tax Alert: IRS Still Seriously Looking For Backdated Stock Options REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED April, May, and June 2007 Retirement Planning: myStockOptions.com Update No. 31 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED January, February, and March 2007 Alert: SEC "Looking At" Rule 10b5-1 Trading Plans Tax Returns: myStockOptions.com Update No. 30 Tax Alert: IRS Confirms Taxes Owed For Backdated Stock Options REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED October, November, and December 2006 AMT Credits With ISOs: New Tax Law Changes Rules Year-End Strategies For Stock Options & Restricted Stock: myStockOptions.com Update No. 29 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED July, August, and September 2006 Employee Stock Purchase Plans (ESPPs): myStockOptions.com Update No. 28 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED April, May, and June 2006 Restricted Stock & Restricted Stock Units (RSUs): myStockOptions.com Update No. 27 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED January, February, and March 2006 Tax Returns: myStockOptions.com Update No. 26 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED October, November, and December 2005 Year-End Planning: myStockOptions.com Update No. 25 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED July, August, and September 2005 ESPPs: myStockOptions.com Update No. 24 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED April, May, and June 2005 Stock Appreciation Rights (SARs): myStockOptions.com Update No. 23 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED January, February, and March 2005 Tax Returns: myStockOptions.com Update No. 22 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED October, November, and December 2004 Year-End Planning: myStockOptions.com Update No. 21 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED July, August, and September 2004 Final IRS Regulations On ISOs REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED April, May, and June 2004 Restricted Stock & RSUs: myStockOptions.com Update No. 20 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED January, February, and March 2004 Tax Returns: myStockOptions.com Update No. 19 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED October, November, and December 2003 myStockOptions.com Update No. 18 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED July, August, and September 2003 myStockOptions.com Update No. 17 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED April, May, and June 2003 myStockOptions.com Update No. 16 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED January, February, and March 2003 myStockOptions.com Update #15 myStockOptions.com Update #14 myStockOptions.com Update #13 myStockOptions.com Update #12 myStockOptions.com Update #11 myStockOptions.com Update #10 myStockOptions.com Update #9 myStockOptions.com Update #8 myStockOptions.com Update #7 myStockOptions.com Update #6 myStockOptions.com Update #5 myStockOptions.com Update #4 myStockOptions.com Update #3 myStockOptions.com Special Election Update myStockOptions.com Update #2 myStockOptions.com Update #1

Articles and FAQs Basics     Basics: Core Concepts How To Avoid The Most Common Stock Option Mistakes (Part 1)  How To Avoid The Most Common Stock Option Mistakes (Part 2)  Stock Option Fundamentals (Part 1): Know Your Goals And Terms  Stock Option Terms: What You Can Expect  How Does Your Company's Stock Plan Compare? (Part 1)  How Does Your Company's Stock Plan Compare? (Part 2)  What Are My Stock Options Worth?  Stockbrokers' Secrets (Part 1): What I Tell My Best Clients About Stock Option Strategy  Stock-Option Basics Sunk By Options The Lure Of Stock Options What is a stock option?  What is restricted stock? Does it differ from restricted securities?  UPDATED! Why do companies grant stock options and other equity awards? How many people have them?  Why doesn't my employer offer me stock options?  Are there any limitations on my company's discretion in granting stock options and/or restricted stock?  What is a stock plan?  What are the important documents I need to understand a stock plan?  Are different types of stock options granted by employers?  How common are stock options, restricted stock, and performance shares outside the US? Do surveys show trends?  UPDATED! How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan?  When did stock option expensing become mandatory? How does this affect and change my stock grants?  Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise?  Will I receive a copy of my company's annual report?  What is a "nonqualified stock option"?  What is an "incentive stock option"?  What is a vesting schedule?  What is "capital gain"? Did the 2006 tax law change the rates?  What methods may be used to exercise an option?  Other than paying the exercise price, what else must I do to exercise an option?  Are all stock options taxed the same?  Do stock options ever expire? What is the standard term?  Once my in-the-money options vest, are they mine forever?  How does a compensatory stock option differ from a publicly traded stock option listed in a newspaper's business section?  What is "common stock"?  What is "preferred stock"?  I have little cash. Will I still be able to take advantage of my company's stock options?  What is the SEC?  Do you have any suggestions for additional resources on stock options, equity pay, and employee ownership?      Basics: Benefits Stock Option Fundamentals (Part 1): Know Your Goals And Terms  A Financial Advisor's View Of Your Stock Plans  Stomach Volatility In Your Company's Stock Without Losing Your Mind  Manage Your Expectations To Avoid The "Option Blues"  Google Options Make Masseuse A Multimillionaire YouTube's Making Millionaires In The Lower Ranks Options Have Lost Their Luster, But Many Still Lust For Them Startups And Stock Options The Effects Of Stock Ownership On Employee Attitudes And Behavior: Evidence From The Rewards Of Work Studies Stock Options For All! Employees Still Crave Options Are stock options free?  UPDATED! Why do companies grant stock options and other equity awards? How many people have them?  Do stock options really motivate employees?  Why do stock options offer greater financial benefits than simply buying shares of company stock in the open market?  Why should I care about stock options?  How can I find out whether my employer offers stock options?  Why doesn't my employer offer me stock options?  If I remain with the company for the duration of the vesting schedule, is there any way I can lose the benefit of my option?  How does a "clawback" work to take away stock grant gains?  What are the benefits of participating in an employee stock purchase plan?  How much will my options be worth in the future?      Basics: Grants How Does Your Company's Stock Plan Compare? (Part 1)  How Does Your Company's Stock Plan Compare? (Part 2)  Stock Option Terms: What You Can Expect  Your Stock Grants May Come With Strings Attached  What is the process of granting equity awards?  How much are my options worth at grant?  What does it mean when someone says that employee stock options have both face (or intrinsic) value and time value?  How is my stock grant's exercise price set?  How is fair market value (FMV) determined for setting my exercise price? What are common company practices?  NEW! Does the IRS have any rules on setting exercise prices?  What is a "stock grant agreement"?  What does a stock grant agreement look like? Where can I find samples?  What guidelines do employers use to determine how many stock options or restricted shares to grant?  What is the difference between variable and fixed stock option grant guidelines?  Is it better to be granted nonqualified stock options (NQSOs) or incentive stock options (ISOs)?  How will I know which type of option I have been granted?  Can I receive grants in more than one year?  Will I be granted stock options automatically every year?  My company granted me stock options and restricted stock under its 2000 plan. Why wasn't my grant under a plan of the current year?  What is a "stock split"?  What is "dilution"?  How does a stock split affect my stock option grants?  Do I pay any taxes when stock options are granted to me?  Must an employer grant options to all employees?  What is a "prospectus"?  Are there any limitations on my company's discretion in granting stock options and/or restricted stock?  Can the exercise price of outstanding stock options ever be raised or lowered? Can the options be repriced?  Can I have the exercise price of a new stock option grant lowered or backdated?  Can stock options be granted outside a formal stock plan?  Can I be granted both incentive stock options and nonqualified stock options?  Can my employer revoke a grant of stock options?  When I am still working at my company, can it rescind or cancel my outstanding stock options or restricted stock before vesting instead of firing me?  Can stock options be granted to union employees?  Are stock options ever granted to temporary employees?  I work for a "professional employer organization." Can stock options be granted to me?  After a grant of stock options, am I treated as a shareholder?  UPDATED! Can a grant of stock options be an insider trading violation?  In personal bankruptcy, can stock options be attached by creditors?  What is the likelihood of receiving a new-hire or periodic stock option grant?  Are stock option and restricted stock grants negotiable? What terms are negotiable at hire?  How many options have been granted to others in my company?  How do I know whether I am being granted my fair share of stock options? Are grant guidelines available publicly so that I can compare my grant to others in my and different industries?  What should I do if I feel that I have been granted too few options?  How common are premium, indexed, and performance-based stock options?  Why is dilution important to me? How do stock grants affect it?  How common are noncompete provisions in stock grants? What activities can trigger a noncompete provision?  Why do companies do reverse stock splits, and how do they affect stock options?  UPDATED! What is a "reload" or "restoration" option? How common are they in stock plans?  Are all reload options alike?      Basics: Vesting Stock Option Fundamentals (Part 2): Vesting And Expiration  Stock Option Terms: What You Can Expect  Prepare Cushion For Layoffs What is a vesting schedule?  Why is vesting important to me?  What is a typical vesting schedule?  How are vesting schedules established?  Are there different types of vesting schedules? Which are most common?  Must all employees have the same vesting schedule?  May I ask for a shorter vesting schedule?  Do technology companies use special vesting schedules?  How much are my vested options worth?  If I remain with the company for the duration of the vesting schedule, is there any way I can lose the benefit of my option?  When does my holding period for capital gains begin? At exercise or vesting?  When does my holding period for the special tax rate on dividends begin? At exercise or vesting?  UPDATED! Does the law mandate any minimum vesting schedule?  I have various stock option grants with vested options. Do I need to exercise first my oldest grants or my oldest vested options?  What service counts toward vesting?  Does service with a previous employer ever count toward vesting?  What happens to vesting if I switch from full-time employment to part-time employment?  How does the vesting of stock options for consultants and contractors differ from the vesting of grants to employees?  Once my in-the-money options vest, are they mine forever?  When I am still working at my company, can it rescind or cancel my outstanding stock options or restricted stock before vesting instead of firing me?  Can I be fired when I am about to vest in company stock options or restricted stock/RSUs?  Do I receive vesting credit while I am on a leave of absence or a sabbatical?  How does a call to active military duty affect stock grants?  Does the reason for my leave of absence or sabbatical affect vesting?  Does maternity leave stop my vesting?  How do unpaid vacations and shutdowns affect vesting schedules?  What happens to vesting if I am transferred to a subsidiary?  What happens to vesting if I leave to work for a joint venture?  After I retire, will my company let my stock options or restricted stock continue to vest, or will it accelerate the vesting?  Is the original vesting schedule ever accelerated by reaching performance milestones or special goals?  What are the features of long-term performance awards, such as performance shares and units? What do surveys say the most commonly used metrics are?  Can my stock option grant be designed to vest only when certain performance targets are reached?  What is an example of a performance goal that triggers or accelerates vesting?  What portion of unvested options is normally accelerated in a change of control?  Can I negotiate faster vesting later while I am working for the company?  Can the terms of my severance accelerate vesting or give me a longer period to exercise my options?  Does vesting automatically accelerate after death?  I am leaving my job. Is my company required to tell me how many vested options I have, how long I can exercise them after I leave, or when they expire?  According to surveys, how are unvested stock options most commonly treated upon various types of termination?  What happens if I terminate my employment before an option grant is fully vested?  Does the reason for my termination affect vesting?      Basics: Exercise Stock Option Fundamentals (Part 6): Exercise Methods  Stock Option Terms: What You Can Expect  Psychological Factors Affect Your Stock Option Exercise Decisions  Out Of Options How is my stock grant's exercise price set?  How is fair market value (FMV) determined for setting my exercise price? What are common company practices?  Other than paying the exercise price, what else must I do to exercise an option?  If my options are vested and have not expired or been forfeited, can my company prevent me from exercising them?  Is my employer required by law to give me choices in how I exercise my options? What are the most common methods?  Are there any limitations on when I can exercise my options?  What price is used for the market price to calculate the spread at exercise in a public company? How will I know what it is?  May I exercise unvested options?  Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise?  Is there a minimum number of stock options that I must exercise at each exercise?  How many times may I exercise options in a given year?  I have various stock option grants with vested options. Do I need to exercise first my oldest grants or my oldest vested options?  What happens if I terminate my employment before an option grant is fully vested?  I am an hourly employee. Does my gain from the exercise of options count in computing overtime?  What methods may be used to exercise an option?  Can my employer later add methods of exercise not provided for in the original grant?  What forms of exercise notice will my company accept?  Will my employer physically deliver shares to me upon exercise of an option?  How do I exercise an option for cash?  What is a "cashless exercise"?  What is the procedure for a cashless exercise/same-day sale?  In a cashless NQSO exercise, how are my taxes withheld and paid to the IRS?  Does the Sarbanes-Oxley Act outlaw cashless exercises by senior executives and directors?  What is a "sell-to-cover" exercise?  How do I use stock that I own to exercise an option in a stock swap? What is the tax treatment?  Can I use ISO stock to exercise NQSOs? Is this a disqualifying disposition that eliminates the special tax treatment for ISOs?  Must I physically deliver the certificates of the swapped shares to my employer?  If I use shares in my possession to exercise an option, must I follow special procedures?  Can I use ESPP shares in a stock-swap exercise of my options?  Can I use restricted stock in a stock swap to exercise my options?  In a stock swap, why does my employer require me to use shares that I have owned for six months or more to exercise an option?  What is a "net options" exercise?  How can I use a promissory note to exercise an option?  What are the customary terms of a promissory note used to exercise an option?  What is a "transfer agent"?  Is there a brokerage commission if I just exercise and hold my shares?  What are the different types of sell orders I can place with my option exercise?  What are margin loans?  How can I use a margin loan to exercise my options?