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 2 parties      Grant of option        Exercise conditions        Tax liability

What is a Non-tax advantaged option agreement?

A “non-tax advantaged option agreement” typically refers to an arrangement where an employee or service provider receives stock options that are not eligible for favorable tax treatment under specific tax codes or regulations.

Tips

• Compliance with Regulations: Adhere to relevant laws and regulations governing stock-based compensation, including securities laws and tax rules. It’s crucial to consult legal and tax professionals to ensure compliance.
• Communication and Transparency: Clearly communicate the terms of the option agreement to recipients, including the potential tax implications. Transparency fosters trust and ensures that recipients understand the value of the stock options they receive.