Stock options grant vest and exercise
{"Image DocumentName": "Options v. Stock Grants: ISO Modifications", "Image ImageDescription": "Generally, modifications, extensions and renewals of an ISO and NSO would be deemed a new grant. If no other changes are made to the exercise price, then: The ISO would lose favorable ISO treatment and be deemed an NSO (because it did not comply with Rule 7 (see Slide 4)) The NSO would likely violate Section 409A and therefore would likely be subject to adverse tax consequences under Section 409A. Such adverse tax consequences include: An earlier inclusion of ordinary taxable income, An additional tax equal to 20% of the amount that that is required to be included as ordinary taxable income, and. Interest, fines and penalties. Avoid modifications by addressing provisions on the front end! Whenever an amendment to an existing option is being considered (whether an ISO or NSO), be sure to determine whether the amendment would be considered a modification, extension or renewal of the option under ISO rules (if applicable) and Section 409A. For example, adding a net exercise feature after-the-fact IS a modification for ISO purposes but is NOT a modification for 409A purposes. 8.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}