Can ISOs be issued to independent contractors?
September 18, 2006
Date: Mon, 08 May 2006
- Does the company pay any taxes relating to incentive stock options granted to independent contractors?
- Can ISOs be issued to independent contractors?
- Can the company make the ISOs available at a $0 cost, as an incentive for making certain sales goals?
Date: Wed, 14 Jun 2006
- See 2.
- ISOs can only be granted to employees. Non-qualified options can be granted to independent contractors.
- No. ISOs and NQOs must be priced at fair market value on the grant date. However, you can make a stock grant as a bonus.
It sounds like you need to consult with an attorney that writes stock-based compensation plans.
It’s dangerous to “wing it” when setting up stock-based compensation plans. Look at all of the trouble major companies are having with the SEC. You can have a plan blow up in your face and both the company and your contractors will lose.