A Non-Qualified Stock Option Award Agreement is a contract between a company and an employee that outlines the terms of a non-qualified stock option (NO) award. This agreement typically grants the employee the right to purchase a certain amount of company stock at a predetermined price. This price is usually lower than the current market value of the stock, allowing the employee to benefit from any increase in the value of the stock. The Non-Qualified Stock Option Award Agreement also outlines vesting schedules, expiration dates, and any other restrictions that may be placed on the stock option. There are two types of Non-Qualified Stock Option Award Agreements: incentive stock options (SOS) and non-qualified stock options (SOS). SOS are granted to employees by a company as an incentive to motivate them to achieve certain goals. They are subject to special tax rules and restrictions, as outlined in the Internal Revenue Code. SOS, on the other hand, are granted to employees without any special tax considerations. Both types of agreements provide the employee with the right to purchase the company's stock at a predetermined price, usually below the market price.