Legal Question in Family Law in Oregon

Re: non-vested stock options

Yes, non-vested stock options may be deemed as marital assets for property division purposes in the context of an Oregon divorce.

How they should be split depends largely on the purpose for which the option was granted to the employee.

Generally, a "time rule" formula is used to determine the portion of the stock option that will be treated as marital property and the portion that will not.

�TIME RULES� for Stock Options that are granted during the marriage and remain unvested at time of dissolution.....

1. If the purpose of the grant is solely as a reward for past services:

Date of employment or date of marriage (whichever is later) to Date of Grant -----> divided by Date of employment to Date of Grant

Used in DeJesus v. DeJesus, 90 NYS2d 643 (1997).

(Appropriate when the asset was acquired entirely during the marriage and the options have vested. No marital apportionment occurs.)

2. If the purpose of the grant is solely as an inducement for future productivity and services:

Date of Grant to Date of Dissolution

-----> divided by Date of Grant to Date of Vesting

Used in Powell and Powell, 147 Or App 17, 934 P2d 612 (1997).

(Appropriate when the presumption of equal contribution has been rebutted. No recognition is given to service time or marital time prior to the date of the grant.)

3. If the purpose of the grant is partly as a reward for past services and partly as an inducement for future retention and services:

Date of employment or date of marriage (whichever is later) to Date of Dissolution

-----> divided by Date of employment to Date of Vesting

Used in In re Marriage of Hug, 154 Cal App 3d 780, 201 Cal Rptr 676 (1984).

(Appropriate when the presumption of equal contribution has not been rebutted. Recognition is given to service time during the marriage both prior to as well as after the date of the grant.)

Best advice: Hire a lawyer. Prferable one who knows what he or she is doing when in comes to stock option division.

L.D. Gorin

LAWRENCE D. GORIN

http://www.divorcesource.com/OR/pages/ldgorin.html

Law Offices of L.D. Gorin

521 S.W. Clay St., Suite 205

Portland, Oregon 97201

Telephone: 503.224.8884

Fax: 503.226.1321

E-mail: [email protected]