Nonstatutory Stock Option definition: Copy, customize, and use instantly
Introduction
The term "Nonstatutory Stock Option" refers to a type of stock option that does not meet the requirements of the Internal Revenue Code Section 422, making it ineligible for favorable tax treatment as an incentive stock option (ISO). This option allows employees to purchase stock at a set price, but the tax treatment is different from statutory stock options.
Below are various examples of how "Nonstatutory Stock Option" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Nonstatutory Stock Option" as an employee incentive
This definition ties "Nonstatutory Stock Option" to employee compensation.
"Nonstatutory Stock Option" refers to a type of stock option granted to employees that is not subject to the preferential tax treatment offered to incentive stock options (ISOs), but provides the employee with the right to purchase company stock at a predetermined price.
Definition of "Nonstatutory Stock Option" as a form of stock-based compensation
This definition connects "Nonstatutory Stock Option" to compensation structures.
"Nonstatutory Stock Option" means a stock option issued to an employee that does not meet the requirements of a statutory option, and is typically subject to ordinary income tax rates upon exercise.
Definition of "Nonstatutory Stock Option" for tax purposes
This definition links "Nonstatutory Stock Option" to tax implications.
"Nonstatutory Stock Option" refers to an option to purchase company stock that does not qualify for tax benefits under section 422 of the Internal Revenue Code, and is instead taxed as ordinary income when exercised.
Definition of "Nonstatutory Stock Option" in the context of private companies
This definition applies "Nonstatutory Stock Option" to privately held companies.
"Nonstatutory Stock Option" means a stock option issued by a private company that grants the right to purchase shares of the company’s stock at a set price, subject to the company's terms and conditions.
Definition of "Nonstatutory Stock Option" for employees and contractors
This definition ties "Nonstatutory Stock Option" to both employees and contractors.
"Nonstatutory Stock Option" refers to a stock option granted to employees or contractors, allowing them to purchase company stock at a predetermined price, subject to specific vesting terms.
Definition of "Nonstatutory Stock Option" as a non-qualified stock option (NSO)
This definition connects "Nonstatutory Stock Option" to non-qualified stock options.
"Nonstatutory Stock Option" means a non-qualified stock option (NSO) granted by the company to its employees or service providers, where the option does not meet the tax code requirements for incentive stock options.
Definition of "Nonstatutory Stock Option" in the context of stock option plans
This definition applies "Nonstatutory Stock Option" to option plans.
"Nonstatutory Stock Option" refers to a type of stock option granted under a company’s stock option plan, where the tax treatment of the option is subject to regular income tax at the time of exercise.
Definition of "Nonstatutory Stock Option" for company shareholders
This definition connects "Nonstatutory Stock Option" to shareholders.
"Nonstatutory Stock Option" means an option granted to employees or directors of a company, enabling them to purchase shares of the company’s stock, where such option does not qualify as an incentive stock option.
Definition of "Nonstatutory Stock Option" as part of a compensation package
This definition links "Nonstatutory Stock Option" to compensation structures.
"Nonstatutory Stock Option" refers to an option granted as part of an employee's compensation package, typically offering the right to purchase stock at a fixed price after a certain period.
Definition of "Nonstatutory Stock Option" for exercising stock options
This definition connects "Nonstatutory Stock Option" to the exercise of options.
"Nonstatutory Stock Option" means an option to purchase company stock that can be exercised at any time after it vests, with the exercise triggering a taxable event at ordinary income rates.
Definition of "Nonstatutory Stock Option" in the context of equity compensation
This definition applies "Nonstatutory Stock Option" to equity compensation.
"Nonstatutory Stock Option" refers to a stock option granted as equity compensation to employees, typically subject to ordinary income tax rates upon exercise and sale of the underlying stock.
Definition of "Nonstatutory Stock Option" for option expiration
This definition ties "Nonstatutory Stock Option" to expiration terms.
"Nonstatutory Stock Option" means a stock option granted to an employee that expires after a certain period, with the holder having the right to purchase stock at a fixed price during the option term.
Definition of "Nonstatutory Stock Option" in the context of corporate governance
This definition connects "Nonstatutory Stock Option" to governance.
"Nonstatutory Stock Option" refers to an option granted by the company to directors or officers, giving them the right to purchase stock, with no preferential tax treatment under the U.S. tax code.
Definition of "Nonstatutory Stock Option" for stock appreciation
This definition links "Nonstatutory Stock Option" to stock value growth.
"Nonstatutory Stock Option" means an option that allows the employee or holder to benefit from the appreciation of the company's stock, with the exercise price set at the stock price on the date of grant.
Definition of "Nonstatutory Stock Option" for retirement planning
This definition ties "Nonstatutory Stock Option" to retirement benefits.
"Nonstatutory Stock Option" refers to a stock option granted as part of a retirement or deferred compensation plan, where the employee is able to exercise the option and realize income upon the sale of the stock.
Definition of "Nonstatutory Stock Option" for stock option vesting
This definition connects "Nonstatutory Stock Option" to vesting periods.
"Nonstatutory Stock Option" refers to a stock option that vests over a period of time, with the employee able to purchase stock at the grant price once the option becomes vested.
Definition of "Nonstatutory Stock Option" for taxable events
This definition links "Nonstatutory Stock Option" to tax events.
"Nonstatutory Stock Option" means a stock option that triggers ordinary income tax upon exercise, where the difference between the exercise price and the fair market value of the stock is taxed as compensation income.
Definition of "Nonstatutory Stock Option" for company performance-based compensation
This definition ties "Nonstatutory Stock Option" to performance incentives.
"Nonstatutory Stock Option" refers to an option granted based on the company’s performance, where the number of shares granted depends on meeting certain performance goals or milestones.
Definition of "Nonstatutory Stock Option" for voluntary exercise
This definition connects "Nonstatutory Stock Option" to the option to exercise.
"Nonstatutory Stock Option" refers to an option that may be exercised at the discretion of the holder, typically after meeting vesting requirements, without any specific tax advantages.
Definition of "Nonstatutory Stock Option" as an alternative to statutory options
This definition applies "Nonstatutory Stock Option" as an alternative.
"Nonstatutory Stock Option" means a stock option granted as an alternative to statutory incentive stock options (ISOs), where tax treatment differs but the option grants the right to purchase company stock.
Definition of "Nonstatutory Stock Option" for financial reporting
This definition connects "Nonstatutory Stock Option" to financial statements.
"Nonstatutory Stock Option" refers to an equity instrument that must be reported on a company’s financial statements, with expenses recognized as the option vests.
Definition of "Nonstatutory Stock Option" in the context of post-termination rights
This definition ties "Nonstatutory Stock Option" to employee termination.
"Nonstatutory Stock Option" means a stock option that may be exercised within a set period after an employee’s termination, subject to the terms of the stock option agreement.
Definition of "Nonstatutory Stock Option" for shareholder rights
This definition links "Nonstatutory Stock Option" to shareholder participation.
"Nonstatutory Stock Option" refers to an option to purchase stock that does not confer any shareholder rights until the option is exercised, such as voting rights or dividend rights.
Definition of "Nonstatutory Stock Option" for future equity compensation
This definition connects "Nonstatutory Stock Option" to future compensation planning.
"Nonstatutory Stock Option" refers to an option granted as part of a future equity compensation program, allowing employees or contractors to purchase stock at a future date.
Definition of "Nonstatutory Stock Option" as an employee benefit
This definition ties "Nonstatutory Stock Option" to employee benefits.
"Nonstatutory Stock Option" means an employee benefit that allows the holder to purchase shares of the company’s stock at a predetermined price, subject to vesting and tax rules.
Definition of "Nonstatutory Stock Option" for the purchase of restricted stock
This definition applies "Nonstatutory Stock Option" to restricted stock purchases.
"Nonstatutory Stock Option" refers to an option to purchase restricted stock, where the holder may be subject to restrictions on selling or transferring the stock once purchased.
Definition of "Nonstatutory Stock Option" for integration with employee retirement plans
This definition connects "Nonstatutory Stock Option" to retirement planning.
"Nonstatutory Stock Option" means an option that is integrated with an employee’s retirement plan, providing the employee with the opportunity to purchase company stock within certain tax-deferred account structures.
Definition of "Nonstatutory Stock Option" for dilution prevention
This definition ties "Nonstatutory Stock Option" to shareholder equity.
"Nonstatutory Stock Option" refers to an option that may be granted with provisions to protect against shareholder dilution, ensuring the option holder's equity stake remains proportionate.
Definition of "Nonstatutory Stock Option" in the context of compensation tax planning
This definition links "Nonstatutory Stock Option" to tax strategies.
"Nonstatutory Stock Option" refers to a stock option that provides flexibility in compensation tax planning, where the exercise price is fixed, but tax implications arise based on the option holder’s income tax bracket.
Definition of "Nonstatutory Stock Option" for merger or acquisition deals
This definition applies "Nonstatutory Stock Option" to corporate transactions.
"Nonstatutory Stock Option" means a stock option that can be exercised or adjusted in the event of a merger or acquisition, typically allowing the holder to receive shares or the equivalent value from the transaction.
Definition of "Nonstatutory Stock Option" for option grant vesting schedules
This definition connects "Nonstatutory Stock Option" to vesting conditions.
"Nonstatutory Stock Option" refers to a stock option that vests according to a schedule determined by the company, with the option holder gaining the right to purchase shares over time based on performance or tenure.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.