In Part I of this topic, I discussed how stock options are characterized as marital or separate property. Part II of this topic addressed the valuation and distribution of stock options in divorce actions. This last in the series, Part III, discusses the information needed to divide stock options in divorce.
Each case involving stock options is fact specific. The employee spouse who holds the options must share information with the non-employee spouse. The parties should exchange the following general information to properly characterize, value and divide stock options.
- The employer stock option plan
- Any Summary Plan Description
- All documents actually granting an option to the employee
- All documents describing why the employer grants the options
- Any benefit statements describing outstanding options
- Any reference in the Employee Manual to any stock option program
- Any documents amending an option plan or an option grant
This is a good starting point for locating the information you need. Request more information if you are not sure of the following:
- The number of shares granted to the employee for each option
- The purpose of the grant
- The grant date
- The vesting date
- Any preconditions before vesting occurs
- The date of exercise of any grants
- The expiration date
- The strike price (the price at which the employee may buy the shares)
- The tax treatment of any award (ordinary income or capital gains), and how the tax will be paid
- Any amendments to the option plan, or any options granted
- Whether the options are transferable (not likely, but you might get lucky)