Page:United States Statutes at Large Volume 78.djvu/110

 68

PUBLIC LAW 88-272-FEB. 26, 1964

[78 STAT.

stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee; "(4) under the terms of the plan, options are to be granted to all employees of any corporation whose employees are granted any of such options by reason of their employment by such corporation, except that there may be excluded— " (A) employees who have been employed less than 2 years, " (B) employees whose customary employment is 20 hours or less per week, " (C) employees whose customary employment is for not more than 5 months in any calendar year, and " (D) officers, persons whose principal duties consist of supervising the work of other employees, or highly compensated employees; "(5) under the terms of the plan, all employees granted such options shall have the same rights and privileges, except that the amount of stock which may be purchased by any employee under such option may bear a uniform rehitionship to the total compensation, or the basic or regular rate of compensation, of employees, and the plan may provide that no employee may purchase more than a maximum amount of stock fixed under the plan; "(6) under the terms of the plan, the option price is not less than the lesser of— " (A) an amount equal to 85 percent of the fair market value of the stock at the time such option is granted, or " (B) an amount which under the terms of the option may not be less than 85 percent of the fair market value of the stock at the time such option is exercised; "(7) under the terms of the plan, such option cannot be exercised after the expiration of— " (A) 5 years from the date such option is granted if, under the terms of such plan, the option price is to be not less than 85 percent of the fair market value of such stock at the time of the exercise of the option, or " (B) 27 months from the date such option is granted, if the option price is not determinable in the manner described in subparagraph (A); "(8) under the terms of the plan, no eniployee may be granted ail option which permits his rights to purchase stock under all such plans of his ejnployer corporation and its parent and subsidiary corporations to accrue at a rate which exceeds $25,00 of fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. For purposes of this paragraph— " (A) the right to purchase stock under an option accrues when the option (or any portion thereof) first l)ecomes exercisable during the calendar year; " (B) the right to purchase stock under an option accrues at the rate provided in the option, but in no case may such rate exceed $25,000 of fair market value of such stock (determined at the time such option is granted) for any one calendar year; and " (C) a right to purchase stock which has accrued under one option granted pursuant to the plan may not be carried over to any other option; and "(9) under the terms of the plan, such option is not transferable by such individual otherwise than by will or the laws of descent and distribution, and is exercisable, during his lifetime, only by him.

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