exercise loan

Exercise Loan

A loan that an employer gives to an employee to enable the employee to exercise his/her stock options. An exercise loan may be forgiven under certain, defined circumstances.

exercise loan

A loan from an employer to an employee to pay for the exercise of incentive stock options. Exercise loans are sometimes forgiven in the event that specified performance goals are met.
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Panel A: Contingency Table OMIS Within No OMIS Within One Year of One Year of Totals Option Exercise Option Exercise Loan Funded 94[105] 60[49] 154 Not Loan Funded 12,722 [12,711] 5,966 [5,977] 18,688 Totals 12,816 6,026 18,842 [chi square] = 3.
Using these criteria, we find adequate matches for 117 of the 146 purchase loans and 109 of the 132 option exercise loans.
Information, incentive alignment, and company loan financing of insider trades
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