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Bonus in Connection with Stock Option Exercise


SycamoreFan

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A stock option agreement provides for a NQSO with an exercise price of 100% of grant date fair market value of the underlying stock; however, the stock option agreement also provides for a bonus equal to the exercise price for each share exercised, which is payable upon exercise. Am I missing something, or is this bonus contingent upon exercise a reduction in the exercise price such that the option loses its "stock right" exemption from 409A? Seems straight forward to me, but I'm wondering if anyone sees a different analysis.

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