“102 options” are a type of employee option plan available in Israel. The name refers to Section 102 of the Israeli Income Tax Ordinance (more accurately 102(b)(2)), which sets out the tax rules for employee share option plans. Under this provision, employees who are granted options may be eligible for tax benefits if certain conditions are met.
These conditions include a holding period requirement and limitations on the number and value of options that can be granted to any individual employee. The purpose of 102 options is to provide a tax-efficient way for Israeli companies to offer equity-based incentives to their employees.