As is widely known, stock options
allow the holder of the option
to buy a certain number of company shares at a certain exercise price for a set period of time.
To be treated as an ISO, an option
must meet certain requirements under Sec.
These include cases in which employees forfeit an option
before it is vested, the company cancels an option
after vesting or an option
expires unexercised, typically because it is underwater.
The value of that compensation is determined on the option
football is almost as old as the game itself, though sparingly used in the early 1900's.
In these circumstances, the initial stage investment or commitment is much like buying a call or an option
The trouble is, option
incentives shift with the stock price.
described above, specifically, the "May 140 call," which shot up from $3 to $8.
Finally, Part V discusses the potential additional benefit of providing in the option
plan for the use of previously acquired shares of employer stock to pay the exercise price under an ISO, and explores other means of facilitating the exercise of ISOs by employees.
allow institutional market participants such as pension funds, money managers and trust funds to select certain terms of an option
contract -- length of time, strike price and exercise style -- to meet precisely their investment objectives while providing the benefits of an exchange-listed product.
Puttable floating option
tax-exempts receipts series PT-2266;
Foremost was a new Financial Accounting Standards Board (FASB) accounting rule that imposes an explicit recognition of stock option
In this case, the taxpayer treated loan purchase commitment fees it received as option
premiums; see Federal Home Loan Mortgage Corp.
123(R) and found a lattice model to be substantially more flexible than a Black-Scholes model, especially with respect to restricted employee stock option
nuances such as vesting, early exercise and blackout periods.
This appears to reverse past practice, but we attribute it to the custom at many companies of making a large option
grant one year and then skipping the next.