

Employment and Stock Options Plan Explained - fixie
http://stason.org/articles/money/investing/everything_you_ever_wanted_to_know_about_employment_and_stock_options_plan.html

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edabobojr
If you are ever exercising your options; get out the crowbar, pry open your
wallet, and go find an accountant to explain all of your tax options and the
risks involved in them.

If you exercise your options, I believe you generate a taxable event. If you
do not sell the stock for twelve months (as advocated in the article), you
risk the stock price dropping below your strike price and you might not have
enough money left to pay your tax bill. I recall reading a sob story (Money
magazine?) about a guy going bankrupt because of this but I haven't been able
to find it.

