Many
companies reward their employees with stock options or bonus shares,
which are generally taxable on exercise. The value of options must
also be disclosed in proxy statements and financial statement footnotes.
In order to avoid conflict with the Internal Revenue Service (IRS)
and Securities and Exchange Commission (SEC), the determination of
the appropriate value is critical when options are designed, granted,
exchanged or repurchased.
For a detailed discussion on the various types of stock options and
SEC and tax reporting issues, please see "Stock
Based Compensation Issues".
