Company: PTPI
Filing Date: 2025-03-07
Form Type: PRE 14A
Source: 0001104659-25-021794
Chunk: 64

Company: Petros Pharmaceuticals, Inc.
Filing Date: 2025-03-07
Form: PRE 14A
Chunk 64
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 of shares surrendered
will be treated as compensation taxable as ordinary income to the participant to the extent of their fair market value. The participant’s
tax basis in these shares will be equal to their fair market value on the date of exercise, and the participant’s holding period
for such shares will begin on the date of exercise.

If the use of previously
acquired shares to pay the exercise price of a stock option constitutes a disqualifying disposition of shares previously acquired under
an incentive stock option, the participant will have ordinary income as a result of the disqualifying disposition in an amount equal
to the excess of the fair market value of the shares surrendered, determined at the time such shares were originally acquired upon exercise
of the incentive stock option, over the aggregate exercise price paid for such shares. As discussed above, a disqualifying disposition
of shares previously acquired under an incentive stock option occurs when the participant disposes of such shares before the end of the
requisite holding periods. The other tax results from paying the exercise price with previously-owned shares are as described above,
except that the participant’s tax basis in the shares that are treated as having been received in a tax-free exchange will be increased
by the amount of ordinary income recognized by the participant as a result of the disqualifying disposition.

Stock Appreciation Rights. No ordinary income will be realized by a participant in connection with the grant
of a SAR. When the SAR is exercised, the participant will realize ordinary income in an amount equal to the sum of the amount of any
cash received and the fair market value of the shares of Common Stock or other property received upon the exercise. Subject to applicable
limitations, the Company generally will be entitled to a corresponding tax deduction equal to the amount includible in the participant’s
taxable income.

Restricted Stock, Performance, and Restricted Stock Unit Awards. The participant will not realize ordinary income
on the grant of an unvested restricted stock award (or a performance award if the shares of Common Stock are issued on grant), but will
realize ordinary income when the shares subject to the award become vested, and the Company will generally will be entitled to a corresponding
deduction, subject to applicable limitations, in an amount equal to the excess of (i) the fair market value of the shares on the
vesting date over (ii) the purchase price, if any, paid for the shares. The participant may, however, elect under Section 83(b) of
the Code to include as ordinary income