The Family Lawyer's Guide to Stock Options
Over 14 million American workers receive employee stock options, making it likely that the issue will arise in an upcoming divorce case. This handy, practice-focused guide provides comprehensive guidance on the valuation, taxation, and distribution of stock options in divorce. It includes sample provisions for property settlement agreements, a 50-state survey of all reported options cases, checklists, charts, glossary, and CD-ROM of appendices.
Search in google:
About the Authors viiAcknowledgments ixGlossary xiIntroduction xvWhen Are Employee Stock Options Marital Property? 1Introduction 1Are Employee Stock Options Property? 1Are Unvested Stock Options Marital Property? 4Time Rules Used to Determine What Portion of Stock Options Are Marital Property 9Summary and Conclusions 18Notes 19Nationwide Court Decisions on Stock Options as Marital Property 21Basic Information Request for Valuing Executive Stock Options 27Employee Stock Option Valuation 29Introduction 29Why Stock Options Have Value 29How Options Are Valued 34Differences between Traded and Employee Stock Options-Nontransferability and the Expected Holding Period 37Volatility 43Are Values Determined by the BSOPM Too Overly Speculative to Be Used for Equitable Distribution? 45Marketability Issues Post Employee Stock Option Exercise 48Determining an Appropriate Marketability Discount 49Summary and Conclusion 51Notes 51The Standard Deviation 53Taxation of Employee Stock Options, Restricted Stock, and Stock Appreciation Rights 57Introduction 57Tax Aspects of Nonqualified Stock Options 58Taxation at the Date of Grant 60Taxation at the Exercise Date 60Marital Property Settlements and Nonstatutory Stock Options 62Tax Aspects of Incentive Stock Options 66Marital Property Settlements and Incentive Stock Options 69Alternative Minimum Tax 70Tax Aspects of Stock Appreciation Rights 70Tax Aspects of Restricted Stock 71The I.R.C. [section] 83(b) Election 72Taxation and the Immediate Offset 73Summary and Conclusion 75Notes 75Deferred Distribution v. Immediate Offset Approaches to Dividing Employee Stock Options* 77Immediate Offset Approach 78Are Option Pricing Models Overly Speculative to Be Used for Equitable Distribution? 82Deferred Distribution Approach 83Advantages and Disadvantages 85Summary and Conclusion 87Notes 88Sample Language for the Division of Stock Options in a Property Settlement Agreement 90Stock Options as Income for Child Support and Alimony 97Introduction 97When Are Employee Stock Options Part of Gross Income? 98Review of Court Decisions 100The Constructive Trust 104Using Employee Stock Options as Property and Income 107Alimony and Spousal Maintenance 108Property Settlement Agreements 109Other Special Circumstances 110Summary and Conclusion 111Notes 112Nationwide Court Decisions on Stock Options as Income for Child Support Purposes 114Nationwide Court Decisions on Stock Options as Income for Alimony and Spousal Maintenance 117Index 119
