Page:United States Statutes at Large Volume 78.djvu/115

 78 STAT. ]

PUBLIC LAW 88-272-FEB. 26, 1964

"(iii) the fair market value of such stock at the time of the making of any intervening modification, extension, or renewal. " (B) Subparagraph (A) shall not apply with respect to a modification, extension, or renewal of a restricted stock option before January 1, 1964 (or after December 31, 1963, if made pursuant to a binding written contract entered into before January 1, 1964), if the aggregate of the monthly average fair market values of the stock subject to the option for the 12 consecutive calendar months before the date of the modification, extension, or renewal, divided by 12, is an amount less than 80 percent of the fair market value of such stock on the date of the original granting of the option or the date of the making of any intervening modification, extension, or renewal, whichever is the highest. "(3) DEFINITION OF MODIFICATION.—The term 'modification' means any change in the terms of the option which gives the employee additional benefits under the option, but such term shall not include a change in the terms of the option— " (A) attributable to the issuance or assumption of an option under subsection (a); " (B) to permit the option to qualify under sections 422(b) (6),423(b)(9),and424(b)(2);or " (C) in the case of an option not immediately exercisable in full, to accelerate the time at which the option may be exercised. If a restricted stock option is exercisable after the expiration of 10 years from the date such option is granted, subparagraph (B) shall not apply unless the terms of the option are also changed to make it not exercisable after the expiration of such period. "(i) STOCKHOLDER APPROVAL.—For purposes of this part, if the grant of an option is subject to approval by stockholders, the date of grant of the option shall be determined as if the option had not been subject to such approval.

73

Ante, p p. 64, 67, 69.

" (j) CROSS REFERENCES.— "For provisions requiring the reporting of certain acts with respect to a qualified stock option, options granted under employer stock purchase plans, or a restricted stock option, see section 6039." (b) ADMINISTRATIVE PROVISIONS.— (1) REPORTING REQUIREMENT FOR CERTAIN OPTIONS,—Subpart

A of part III of subchapter A of chapter 61 (relating to information returns) is amended by renumbering section 6039 as 6040, and by inserting after section 6038 the following new section: "SEC. 6039. INFORMATION REQUIRED IN CONNECTION WITH CERTAIN OPTIONS. " (a) REQUIREMENT OF REPORTING.—Every corporation—

"(1) which in any calendar year transfers a share of stock to any person pursuant to such person's exercise of a qualified stock option or a restricted stock option, or "(2) which in any calendar year records (or has by its agent recorded) a transfer of the legal title of a share of stock— " (A) acquired by the transferor pursuant to his exercise of an option described in section 423(c) (relating to special rule where option price is between 85 percent and 100 percent of value of stock), or

26 USC 60316039.

�