Characterizing Employee Benefits (Non Federal)

Stock Options & Restricted Stock Plans.

Characterization of employer provided stock options and restricted stock are governed by a formula expressed in Tex. Fam. Code § 3.007 (d) – (e). Each grant of a stock option or a restricted share must be characterized using the applicable formula.

Stock Options Granted Before Marriage. A stock option or restricted share granted to a spouse before marriage AND the spouse is required to work either during marriage or after divorce but before the grant can be exercised or the restriction removed, the separate property interest is calculated as follows:

# of days between grant date & date of marriage
+
# of days between divorce & date option can be exercised or restriction removed
(if post-divorce employment is required)
——————————————————————————
# of days between grant date & date option can be exercised or restriction removed

NOTE: Main difference is factoring the date of the grant of the stock option or restricted share and the date of marriage, i.e. whether granted before or after marriage.