Company: SCLXW
Filing Date: 2025-10-28
Form Type: PRE 14A
Source: 0001193125-25-253884
Chunk: 16

Company: Scilex Holding Co
Filing Date: 2025-10-28
Form: PRE 14A
Chunk 16
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 and (ii) more than one year
after its exercise (together, the “ISO Holding Period”), the participant will recognize long-term capital gain (or loss) to the extent the amount realized from the disposition exceeds (or is less than) the participant’s tax basis
in the shares of our Common Stock. For purposes of the ISO Holding Period, the date of grant of a repriced incentive stock option will be the Repricing Date. A participant’s tax basis in shares of our Common Stock acquired upon exercise
generally will be the amount the participant paid for the shares.

If our Common Stock acquired pursuant to the exercise of an incentive stock option is
disposed of before the expiration of the ISO Holding Period, the participant will recognize as ordinary income in the year of the disposition the excess of the fair market value of our Common Stock on the date of exercise over the exercise price.
Any additional gain will be treated as long-term or short-term capital gain, depending on the length of time the participant held the shares. A special rule applies to such a disposition where the amount realized is less than the fair market value
of our Common Stock on the date of exercise of the incentive stock option. In that case, the ordinary income the participant will recognize will not exceed the excess of the amount realized on the disposition over the exercise price. If the amount
realized is less than the exercise price, the participant will recognize a capital loss (long-term if the stock was held more than one year and short-term if held one year or less).

The aggregate exercise price of all incentive stock options granted to an employee that first become exercisable in any calendar year cannot exceed $100,000,
based on the fair market value of our Common Stock on the date of grant. The Option Repricing is treated as the grant of a new option for tax purposes and therefore, this $100,000 limitation must be recalculated for incentive stock options that are
repriced, and this could result in all or a portion of an option that previously qualified as an incentive stock option no longer qualifying as an incentive stock option after the Option Repricing. An option, or portion thereof, that no longer
qualifies as an incentive stock option will become a non-statutory stock option.

We will not be entitled to a
federal income tax deduction with respect to the grant or exercise of an incentive stock option. However, in the event a participant disposes of our Common Stock acquired pursuant to the exercise of an incentive stock option before the expiration of
the ISO