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Please consult with your corporate attorney and/or tax accountant concerning the many differences between these two types of options. As a general rule, however, ISOs are available only to employees of the company, and NSOs are available to others (e.g., board members and consultants).
Related Questions:
How many options will my employees be granted?
How do I grant options to employees?
How do I grant options to board members?
How do I grant options to consultants?