[jalonso510]

Only a couple or reasons they'd deliverately do that. Most common is if the employee is outside the U.S. and not a U.S. taxpayer, making the distinction irrelevant.

Or, if you plan to early exercise immediately upon receipt, you actually are better off with an NSO (due a shorter holding period for long-term capital gains treatment and there being no spread between exercise price and fair market value at the time of exercise), so sometimes you will see that too.

Or, if you want a longer than 3 months exercise period post-termination, you'll do an NSO instead of an ISO.

But otherwise, yeah, maybe just a mistake.

[sk5t]

My employer has issued _all_ option grants as NQSOs (with "normal" 4 year vesting, but also with 90 day exercise or forfeiture, with FMV clawback right, with rather tepid spread between preferred and common after seed). I'll be charitable and suppose the big old law firm wrote this out of startup inexperience and a very strong dose of CYA. Any suggestions on what to do about this?

[jalonso510]

Sounds pretty unfriendly, but no, no suggestions really - it's up to the company what they want to give you and some companies are just stingy like that. Wish I had something more for you.

[sulam]

I've heard of longer exercise periods for ISOs, although these were while still employed. Is the 90 days post-termination encoded into law?

[hkmurakami]

those convert to NQOs after 90 days. It's coded into law.