You are previewing Ten Minute Guide to Employee Stock Option Purchase Plans.
O'Reilly logo
Ten Minute Guide to Employee Stock Option Purchase Plans

Book Description

If you find yourself sorting through a maze of vesting schedules, option plans, investing data and tax advice, this book is for you. It will give you the information you need, defining terms and concepts and explaining how most ESOPPs work. While you will still need the specifics of your own corporate plan, this guide will help you know what questions to ask and how to understand the answers. From explaining stock options to risk assessment, Alex will walk you through the exciting and complex world of employee stock options.

Table of Contents

  1. Copyright
  2. Introduction
    1. Extras
    2. Acknowledgments
    3. Trademarks
  3. 1. Employee Stock Options
    1. Everybody Wants Stock Options
    2. Goals
    3. What Is an Employee Stock Option?
    4. Different Types of Options
    5. ESPPs
    6. Alternative Plans
      1. ESOPs
      2. Stock Purchases and Grants
    7. The 30-Second Recap
  4. 2. Why Options Are Important
    1. Options as Compensation
    2. Options as a Motivator
    3. Placing a Value on Your Options
    4. Options and Your Portfolio
      1. Alternative Number One
      2. Alternative Number Two
      3. Alternative Number Three
      4. Alternative Number Four
    5. The 30-Second Recap
  5. 3. An Investing Primer
    1. You're an Investor Now
    2. Investing Short Course
      1. What Are Stock Shares?
    3. Investing Basics
      1. The Importance of Compounding
      2. The Importance of Diversification
      3. Keep Expenses Low
    4. Options
      1. Option Terms
      2. Options and Taxes
    5. The 30-Second Recap
  6. 4. All About Vesting, Lock-Ups, etc.
    1. Vesting
      1. Immediately Vested Options
    2. What If I Leave?
    3. Lockup Period
    4. The 30-Second Recap
  7. 5. Incentive Stock Options
    1. Incentive Stock Options Defined
      1. ISO Rules
    2. Holding Period
      1. Important Dates
    3. Exercise Price
    4. Miscellaneous Points
    5. Advantages of ISOs
    6. Tax Consequences of ISOs
    7. Disqualifying Disposition
    8. Alternative Minimum Tax Consequences
    9. The 30-Second Recap
  8. 6. Nonqualified Stock Options
    1. Nonqualified Stock Options Defined
    2. Few NSO Rules
      1. Examples of Flexibility
    3. Options as a Bonus
    4. Price
    5. Options as Motivators
    6. Flexibility of NSOs
    7. No Limits
    8. Tax Consequences of NSOs
    9. The 30-Second Recap
  9. 7. When to Exercise Your Options
    1. Cashing In on Your Options
    2. What Are Your Options?
      1. Exercise and Sell the Stock
      2. Exercise the Options and Hold the Stock
      3. Hold On to the Options
    3. The 30-Second Recap
  10. 8. Exercising Your Options
    1. The Process
    2. Which Options to Exercise
    3. Paying for the Stock
      1. Withholding Taxes
    4. Cashless Transaction
      1. Taxes and the Cashless Exercise
    5. Using Stock to Exercise Options
      1. Taxes and Paying with Stock
    6. The 30-Second Recap
  11. 9. Taxes and Options
    1. Tax Warning
    2. Tax Terms
      1. Ordinary Income
      2. Capital Gains
      3. Tax Bracket
      4. Basis
    3. Alternative Minimum Tax
    4. Long-Term Capital Gains
      1. Incentive Stock Options
      2. AMT Summary
    5. The 30-Second Recap
  12. 10. Taxes and Your Options
    1. Taxes and Nonqualified Stock Options
      1. Exercise Options and Sell the Stock
      2. Step One: Exercising the Options
      3. Step Two: Selling the Stock
      4. Shifting Tax Liability
      5. Cashless Transaction
      6. When to Exercise Your NSO Option
    2. Taxes and Incentive Stock Options
    3. The 30-Second Recap
  13. 11. Options and the IPO
    1. Winning the Lottery
    2. Initial Public Offering (IPO)
    3. Securities Laws
    4. Options and the Private Company
    5. Underwriters
    6. Taxes
    7. The 30-Second Recap
  14. 12. Options and the Private Company
    1. The Private Company
    2. Complications
    3. Tax Issues
    4. Vesting
    5. Employee Stock Purchase Plans
    6. Stock Appreciation Rights
      1. The Skinny on SARs and Phantom Stocks
    7. The 30-Second Recap
  15. 13. Employee Stock Purchase Plans
    1. Not an Option, but Close
    2. ESPP Features
    3. How the ESPP Plan Works
    4. Taxes
    5. ESPPs as an Investment
    6. The 30-Second Recap
  16. 14. Employee Stock Ownership Plans
    1. Owning the Company
    2. What Is Their Goal?
    3. Qualifying the Plan
    4. How ESOPs Work
      1. Vesting
      2. Stock or Cash
    5. Taxes on ESOPs
      1. Dividends
    6. ESOPs as an Investment
    7. Timing
    8. The 30-Second Recap
  17. 15. More Strategies and Tips
    1. Additional Help
    2. Divorce
    3. Transfer Options
    4. Section 83b
    5. Psychological Factors
    6. Independent Contractors and Others
    7. Noncompete Provisions
    8. Repricing Options
    9. Death and Disability
    10. Asking for Help
    11. The 30-Second Recap
  18. 16. Frequently Asked Questions
    1. No Simple Answers
    2. Employment and Termination
    3. Employee Stock Purchase Plans
    4. Exercising Your Options
    5. Insider Trading
    6. Your Estate and Options
    7. Disability
    8. Bought and Sold
    9. Vesting Issues
    10. Selling My Stock
    11. The 30-Second Recap
  19. A. Glossary
  20. B. Further Reading