Impact of Proposed Regs on ESPPs

[Guest DMK]

Has anyone noticed the little provision in the proposed regs on statutory options that came out last summer that would provide that an option grant is not complete (and hence the date of grant not fixed for purposes of Sections 421 through 424) until the "maximum number of shares that can be purchased under the option and the minimum option price are fixed and determinable"? How would a Section 423 Employee Stock Purchase Plan look-back plan (e.g., price is 85% of lesser of value on grant date or exercise date) be able to work since the minimum option price won't be known until exercise? It almost seems that this means for purposes of Code Section 423's look-back provisions, date of grant would de facto be the date of exercise and the price, holding period, etc. would all have to be keyed off of that date. I haven't seen any commentary on this issue. Any input would be appreciated. Thanks.