Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is not meant to be legal advice.

On April 25, 2007, Wilson Sonsini Goodrich Rosati, PC hosted a talk on stock options.

Until a person starts employment, the person should not be granted any options.  Options should not be granted to non-service providers.  The person is not a service provider until employment commences.  The person may be made an independent contractor, but independent contractor agreements should not be set for purposes of granting options to someone.  The consulting agreements should only be for bona fide services.  A company should realize that consultants are not able to be given ISOs.  Consultants may only get non-statutory stock options, which cannot later be converted to ISOs even when a person becomes an employee.

When a person exercises his/her options, the company should be sure to get payment for the options.  There is not an exercise until the payment is received.