recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the date it
becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days following his or her receipt of the stock award, to recognize ordinary
income, as of the date the recipient receives the award, equal to the excess, if any, of the fair market value of the stock on the date the award is granted over any amount paid by the recipient for the stock.
The recipients basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock award will be the
amount paid for such shares plus any ordinary income recognized either when the stock is received or when the stock becomes vested.
Subject to the
requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of
the stock award.
Restricted Stock Unit Awards
Generally, the recipient of a restricted stock unit award structured to conform to the requirements of Section 409A of the Code or an exception to
Section 409A of the Code will recognize ordinary income at the time the stock and dividend equivalents, if any, are delivered equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in
exchange for the stock. To conform to the requirements of Section 409A of the Code, the stock subject to a restricted stock unit award may generally only be delivered upon one of the following events: a fixed calendar date (or dates),
separation from service, death, disability or a change in control. If delivery occurs on another date, unless the restricted stock unit award otherwise complies with or qualifies for an exception to the requirements of Section 409A of the Code,
in addition to the tax treatment described above, the recipient will owe an additional 20% federal tax and interest on any taxes owed.
The
recipients basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is
delivered.
Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting
obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock unit award.
Stock Appreciation Rights
Generally, if a stock
appreciation right is granted with an exercise price equal to the fair market value of the underlying stock on the grant date, the recipient will recognize ordinary income equal to the fair market value of the stock or cash received upon such
exercise. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income
realized by the recipient of the stock appreciation right.
New Plan Benefits and Option Grant Table
Because the 2016 Plan is discretionary, benefits to be received by individual participants are not determinable. However, pursuant to the current director
compensation program established by our Board of Directors, each continuing
non-employee
member of our Board of Directors will receive an option to purchase 10,000 shares and an RSU representing 5,000
shares on the date of the Annual Meeting. The table below shows, as to each of our named executive officers and the various indicated groups (a) the number of shares of common stock for which options and RSUs have been granted for (i) the
one-year
period ended December 31, 2017 and (ii) the period
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