STOCK OPTIONS (ISOs & NQSOs)
01.Core Concepts
• Ideally, planning for exercise and disposition of stock options begins at least five years prior to planned retirement. • Plan for tax and cash flow efficiency • ISOs must be exercised within 90 days of retirement. • After 90 days, options may expire or may convert to NQSOs. • Stock options may represent a large portion of an employee’s net worth. • Concentrated position (value based on value of company stock) • Need to develop an efficient and effective plan for exercising options and selling stock for reallocation.