Mary received 1,000 NQSOs with an exercise price of $25 per share when the stock was $25 on the market. Two years from the date of grant Mary exercises when the stock price is $87. At exercise, Mary: 1) Has W-2 income of $25,000 2) Has an AMT adjustment of $82,000 3) Has W-2 income of $62,000 4) Has W-2 income of $87,000