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Anonymous Chief Executive Officer

FMV for performance linked stock for 83B election

Asked on May 9, 2013

I have to make an 83B election for some performance linked stock options (NSO) that the company is ready to vest immediately but performance conditions will continue to exist for me to buy the stock.

1. Should the FMV for the purpose of 83B election be same as the current FMV of company's stock as per the latest 409A report they have done?

2. Given that the stock would be subject to significant performance conditions, can their be some additional discount on account of that, over the current FMV of Company's stock.

Answers

Anonymous VP, Special Projects • August 13, 2012

My understanding is there can be a potential adjustment to FMV at each reporting cycle over the service period for performance based equity compensation based on the PROBABILITY of achieving the performance targets.

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