Company: RGNX
Filing Date: 2025-04-08
Form Type: DEF 14A
Source: 0000950170-25-052069
Chunk: 81

Company: REGENXBIO Inc.
Filing Date: 2025-04-08
Form: DEF 14A
Chunk 81
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 not recognize income for federal income tax purposes when the participant is granted an ISO.

Exercise. In general, the participant will not recognize income for purposes of computing the participant’s regular federal income tax liability when the participant exercises an ISO, provided that the participant meets the employment requirement described in the next paragraph. (As explained under “Alternative Minimum Tax” below, the participant is required to recognize income for purposes of computing the participant’s alternative minimum tax liability when a participant exercises an ISO.)

In order to avoid recognizing income for regular income tax purposes when a participant exercises an ISO, the participant must remain employed by the Company (or by a subsidiary in which the Company holds at least 50% of the voting power) from the date the participant receives the ISO until three months before the participant exercises it. The three-month period is extended to one year if the participant’s employment terminates on account of disability. This employment requirement generally does not apply if the participant’s employment terminates on account of the participant’s death. Certain leaves of absence, such as sick leave and military leave, lasting up to three months (or longer if the participant has a statutory or contractual right to reemployment) are ignored in applying this employment requirement. If the participant does not meet the employment requirement, the option will be treated for federal income tax purposes as an NSO, and the participant will recognize income when the participant exercises the option.

Qualifying Disposition. If a participant exercises an ISO and holds the shares for at least one year from the date of exercise and two years from the date on which the option was granted, the participant generally will recognize capital gain (or loss) when the participant disposes of the shares. The gain (or loss) will equal the difference between the amount the participant realizes on the disposition and the exercise price. As explained under “Capital Gain” below, the rate at which capital gain is taxed depends on how long the participant has held the shares before disposing of them. The holding period generally is measured from the date on which the participant exercised the option and received the shares.

Disqualifying Disposition. If the participant sells or otherwise disposes of any ISO shares before the end of the one-year and two-year periods described above, then the participant will have made a “disqualifying disposition” with respect to those shares.

If the amount the participant realizes in a “disqualifying disposition” is greater than the fair market value of the shares on the date the participant exercised the option, the participant will recognize ordinary income (rather than capital gain) in