Non-Qualified Stock Option
/ˌnɑnˈkwɑləˌfaɪd stɒk ˈɒpʃən/
Definitions
- (n.) A type of stock option granted to employees or others without meeting the criteria for incentive stock options, subject to ordinary income tax upon exercise.
The employee exercised the non-qualified stock option and paid income tax on the difference between the exercise price and the fair market value.
Forms
- non-qualified stock option
- non-qualified stock options
Related terms
See also
Commentary
Non-qualified stock options do not receive special tax treatment like incentive stock options, making their tax consequences a critical consideration in drafting and employee compensation planning.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.