Nonqualified Stock Option Plan of Medicore, Inc., for officers, directors, consultants, key employees

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US-CC-18-191
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Word; 
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Description

This sample form, a detailed Stock Option Plan, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.
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FAQ

Once you exercise your non-qualified stock option, the difference between the stock price and the strike price is taxed as ordinary income. This income is usually reported on your paystub. There are no tax consequences when you first receive your non-qualified stock option, only when you exercise your option.

Non-qualified stock options (typically abbreviated NSO or NQSO) are stock options which do not qualify for the special treatment accorded to incentive stock options. Incentive stock options are only available for employees and other restrictions apply for them.

Depending upon the tax treatment of stock options, they can be classified into qualified and non-qualified stock options. Qualified stock options are also called Incentive Stock Options (ISO). Nonqualified: Employees generally don't owe tax when these options are granted.

When you exercise your non-qualified stock options, the value of the bargain element will be treated as earned income that is reported on your tax return the same way as your regular earned income.

1: Exercise and Sell When Your Non-Qualified Stock Options Vest. The vest date is when you (the stock option holder) have the right to exercise non-qualified stock options. Prior to this vesting date, you may not be able to do anything.

Once you exercise your non-qualified stock option, the difference between the stock price and the strike price is taxed as ordinary income. This income is usually reported on your paystub.If you hold the shares for less than one year, any gain is taxed at your ordinary income tax rates, which are usually higher.

What Is a Non-Qualified Stock Option (NSO)? A non-qualified stock option (NSO) is a type of employee stock option wherein you pay ordinary income tax on the difference between the grant price and the price at which you exercise the option.

The Cost Basis of Your Non-Qualified Stock Options The cost basis is equal to the exercise price, multiplied by the number of shares exercised. In our example above, the cost basis is equal to 2,000 shares times $50/share, or $100,000.

Restricted stock is considered supplemental wages, following the same tax rules and W-2 reporting that apply to grants of nonqualified stock options.As a result, any appreciation in the stock price above the grant date value is taxed at capital gains rates when you sell the stock after vesting.

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Nonqualified Stock Option Plan of Medicore, Inc., for officers, directors, consultants, key employees