1. Marisol was granted 100 NQSOs on January 12^th, five years ago. At the time of the option grant, the value of the underlying stock was $100 and the exercise price was equal to $100. If Marisol exercises the options on August 22^nd of this year, when the stock is valued at $145, what are the tax consequences (per share) to Marisol?

(a) $45 of W-2 income, $100 of short-term capital gain.

(b) $100 of W-2 income, $45 of short-term capital gain.

(c) $145 of W-2 income.

(d) $45 of W-2 income.