The Family Lawyer’s Guide to Stock Options
About the Authors
Acknowledgments
Glossary
Introduction
Chapter 1
When Are Employee Stock Options Marital Property?
A. INTRODUCTION
B. ARE EMPLOYEE STOCK OPTIONS PROPERTY?
C. ARE UNVESTED STOCK OPTIONS MARITAL PROPERTY?
D. TIME RULES USED TO DETERMINE WHAT PORTION OF STOCK OPTIONS
ARE MARITAL PROPERTY
E. SUMMARY AND CONCLUSIONS
NOTES
APPENDIX 1-A: NATIONWIDE COURT DECISIONS ON STOCK OPTIONS AS
MARITAL PROPERTY
APPENDIX 1-B: BASIC INFORMATION REQUEST FOR VALUING EXECUTIVE
STOCK OPTIONS
Chapter 2
Employee Stock Option Valuation
A. INTRODUCTION
B. WHY STOCK OPTIONS HAVE VALUE
C. HOW OPTIONS ARE VALUED
D. DIFFERENCES BETWEEN TRADED AND EMPLOYEE STOCK OPTIONS —
NONTRANSFERABILITY AND THE EXPECTED HOLDING PERIOD
E. VOLATILITY
F. ARE VALUES DETERMINED BY THE BSOPM TOO OVERLY SPECULATIVE
TO BE USED FOR EQUITABLE DISTRIBUTION?
G. MARKETABILITY ISSUES POST EMPLOYEE STOCK OPTION EXERCISE
H. DETERMINING AN APPROPRIATE MARKETABILITY DISCOUNT
I. SUMMARY AND CONCLUSION
NOTES
APPENDIX 2-A: THE STANDARD DEVIATION
Chapter 3
Taxation of Employee Stock Options, Restricted Stock, and Stock Appreciation Rights
A. INTRODUCTION
B. TAX ASPECTS OF NONQUALIFIED STOCK OPTIONS
C. TAXATION AT THE DATE OF GRANT
D. TAXATION AT THE EXERCISE DATE
E. MARITAL PROPERTY SETTLEMENTS AND NONSTATUTORY STOCK
OPTIONS
F. TAX ASPECTS OF INCENTIVE STOCK OPTIONS
G. MARITAL PROPERTY SETTLEMENTS AND INCENTIVE STOCK OPTIONS
H. ALTERNATIVE MINIMUM TAX
I. TAX ASPECTS OF STOCK APPRECIATION RIGHTS
J. TAX ASPECTS OF RESTRICTED STOCK
K. THE IRC § 83(b) ELECTION
L. TAXATION AND THE IMMEDIATE OFFSET
M. SUMMARY AND CONCLUSION
NOTES
Chapter 4
Deferred Distribution v Immediate Offset Approaches to
Dividing Employee Stock Options
A. IMMEDIATE OFFSET APPROACH
B. ARE OPTION PRICING MODELS OVERLY SPECULATIVE TO BE USED FOR
EQUITABLE DISTRIBUTION?
C. DEFERRED DISTRIBUTION APPROACH
D. ADVANTAGES AND DISADVANTAGES
E. SUMMARY AND CONCLUSION
NOTES
APPENDIX 4-A: SAMPLE LANGUAGE FOR THE DIVISION OF STOCK OPTIONS
IN A PROPERTY SETTLEMENT AGREEMENT
Chapter 5
Stock Options as Income for Child Support and Alimony
A. INTRODUCTION
B. WHEN ARE EMPLOYEE STOCK OPTIONS PART OF GROSS INCOME?
C. REVIEW OF COURT DECISIONS
D. THE CONSTRUCTIVE TRUST
E. USING EMPLOYEE STOCK OPTIONS AS PROPERTY AND INCOME
F. ALIMONY AND SPOUSAL MAINTENANCE
G. PROPERTY SETTLEMENT AGREEMENTS
H. OTHER SPECIAL CIRCUMSTANCES
I. SUMMARY AND CONCLUSION
NOTES
APPENDIX 5-A: NATIONWIDE COURT DECISIONS ON STOCK OPTIONS AS
INCOME FOR CHILD SUPPORT PURPOSES
APPENDIX 5-B: NATIONWIDE COURT DECISIONS ON STOCK OPTIONS AS
INCOME FOR ALIMONY AND SPOUSAL MAINTENANCE
Index