IRS Memo on backdated options under Section 162(m).
Document Excerpt
Application of Section 162(m) to Backdated and Misdated Stock Options
This Generic Legal Advice responds to your request for assistance. This advice may not be used or cited as precedent.
ISSUES
I. How is the date of grant of a stock option determined for purposes of § 162(m)?
II. Does a stock option whose exercise price was less than the fair market value of the stock at the date of grant (“discounted stock option”) qualify as performance-based compensation under § 162(m)(4)(C) where the executive reimburses the employer for the excess of the fair market value on the date of grant over the exercise price or an agreement is entered into between the executive and the employer before exercise which provides for the exercise price to be increased to the fair market value of the stock on the grant date?
RSS Feeds