Sec 409A - Accelerate vesting w/o accelerating exercisability

[Guest SPQR888]

Under the new proposed Sec. 409A regs. issued on September 29th, can you accelerate vesting of NQSO without changing (accelerating) the date of exercisabilty of such options ? The options were originally issued at FMV but now are in- the- money options. If such change is deemed to be a "modification" or "material modification" such options would be subject to Sec. 409A.

[Guest Harry O]

Assuming the options were granted "at the money" they weren't deferred compensation subject to 409A. A change to vest the option (but keep the original exercise dates?) does not seem to be a modification under the new proposed regs. My two cents after a quick read . . .

[Guest SPQR888]

Thanks, proposed regs section 1.409A-1 (b)(5)(v)(B) appears to list what is considered a "modification" and "vesting" does not appear as as a "modification".

Also, 1.409A-3(h)(1) appears to say accelerated vesting is not an acceleration of payment.

With respect to "accelerating exercisabilty" 1.409A-1(b)(5)(v)(E) indicates accelerated exercisabilty of a stock right is not a "Material " modification. The word "Material" appears in this section whereas the rest of (v) only refers to "modification". So, can we accelerate exercisabilty without it being considered a "modification"?

Thanks for any insight.