Company: MGNO
Filing Date: 2025-08-14
Form Type: DEF 14A
Source: 0000927089-25-000145
Chunk: 22

Company: Magnolia Bancorp, Inc.
Filing Date: 2025-08-14
Form: DEF 14A
Chunk 22
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c) if permitted by the committee or the Board of Directors, by delivering shares of common stock (including shares acquired pursuant to the previous exercise of an option) with a fair market value equal to the total purchase price of the shares being acquired pursuant to the option, by withholding some of the shares of common stock which were purchased upon exercise of an option or any combination of the foregoing.

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Term of the Stock Option Plan. Unless sooner terminated, the Stock Option Plan shall continue in effect for a period of ten years from September 18, 2025, assuming approval of the Stock Option Plan by our shareholders on that date, except that incentive stock options must be granted no later than the tenth anniversary of the date the Board of Directors adopted the plan. Termination of the Stock Option Plan shall not affect any previously granted and outstanding options.

Federal Income Tax Consequences. Under current provisions of the Internal Revenue Code, the federal income tax treatment of incentive stock options and compensatory stock options is different. Regarding incentive stock options, an optionee who meets certain holding period requirements will not recognize income at the time the option is granted or at the time the option is exercised, and a federal income tax deduction generally will not be available to Magnolia Bancorp at any time as a result of such grant or exercise. An optionee, however, may be subject to the alternative minimum tax upon exercise of an incentive stock option. With respect to compensatory stock options, the difference between the fair market value of the shares on the date of exercise and the option exercise price generally will be treated as compensation income upon exercise, and Magnolia Bancorp will be entitled to a deduction in the amount of income so recognized by the optionee.

Section 162(m) of the Internal Revenue Code generally limits the deduction for certain compensation in excess of $1.0 million per year paid by a publicly traded corporation to its chief executive officer, its chief financial officer and the three other most highly compensated executive officers in any calendar year (“covered executives”), with covered executives reaming subject to Section 162(m) for all subsequent years.

The Board of Directors believes that the likelihood of any impact on Magnolia Bancorp from the deduction limitation contained in Section 162(m) of the Internal Revenue Code in the foreseeable future is remote at this time.

The above description of tax consequences under federal law is necessarily general in nature and does not purport to be complete. Moreover, statutory provisions are subject to change, as are their interpretations, and their application