The purchase price of the shares covered by the option is set in the plan (the “purchase price”) in accordance with the notification of the subsidy provided by the plan in the event of stock splits, share splits or other events involving stockholders after the date of this option. Payment is made in accordance with paragraph 9 of the plan. Unqualified stock options (NSOs) are taxed as normal income. Profits from the sale of unqualified stock options may be taxed as normal income or a combination of ordinary income and capital gains, depending on how quickly they are sold after the exercise of the options. Incenttive stock options receive more favourable tax treatment than unqualified stock options in part, as they require the holder to hold the stock for a longer period of time. Of course, there is no guarantee that the share price will be higher than the strike price at the time of the vest option. If it is lower, the employee may stick to the options until shortly before the expiry date, in the hope that the price will increase. Incentive stock options usually expire after 10 years. For the employee, the ISO setback is the greatest risk resulting from the waiting time before the options are sold.
In concluding this agreement, the staff member: (i) the company and any affiliate, as well as any representative of the company or related company that manages the plan or provides registration services for the plan, authorizes the company or any of its related companies to disclose to the company or any of its related companies the information and data that the entity or such partner must request in order to facilitate the granting of options and management; (ii) abstain from electronic data protection rights; and (iii) authorizes the entity and any affiliate to store and transmit this information electronically. Options can be used as a form of compensation that increases wages, or as a reward instead of a traditional salary increase. Stock options, like other benefits, can be used as a means of attracting talent, especially if the company cannot currently afford to pay competitive base salaries. Stock option premiums are a widely used tool to motivate service providers. However, given that the options are somewhat complex, it is recommended that strong legal counsel be found for businesses to ensure that errors (particularly with respect to tax and securities legislation) do not occur. Keep in mind that stock options are generally used to attract, motivate and retain service providers, and compliance errors in compensating your staff could jeopardize these goals. The company is not bound by the plan or option to sue the employee as a member of the company or a related company. The employee acknowledges: (i) that the plan is discretionary and may be suspended or terminated at any time by the company; (ii) that the granting of the option is a one-time benefit that does not justify a contractual or other right to the future granting of options or benefits instead of options; (iii) that all decisions regarding such future subsidies, including the periods at which options are granted, the number of shares subject to any option, the price of the option and the time or times when each option may be exercised are at the company`s discretion; (iv) that the worker`s participation in the plan is voluntary; (v) that the value of the option is an exceptional amount of compensation that, if applicable, does not fit within the scope of the worker`s employment contract; and (vi) that the option is not part of a normal or expected allowance for the calculation of severance pay, resignations, terminations, service allowances, bonuses, long-term bonuses, pension or pension benefits, or similar payments.