Employee security option cash-out rights

If you acquire securities under a security option agreement and meet certain conditions, you may be entitled to a deduction equal to one-half of the security option benefit (security option deduction). In this case, your employer cannot claim a deduction for the issuance of the share.

Employee security option agreements can also be structured in such a way that you can dispose of your security option rights to your employer for a cash payment or other in-kind benefit.

For such transactions occurring after 4 p.m. EST on March 4, 2010, the security option deduction can only be claimed in one of the following situations:

Return to Employee security options for other information.

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