Company: FFWM
Filing Date: 2025-04-17
Form Type: DEF 14A
Source: 0001104659-25-036041
Chunk: 52

Company: First Foundation Inc.
Filing Date: 2025-04-17
Form: DEF 14A
Chunk 52
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 at this time. Accounting Treatment As required by Financial Accounting Standards Board Accounting Standards Codification, “Share-Based Payment,” upon the grant of options, SARs, stock units or restricted shares pursuant to the Amended 30 TABLE OF CONTENTS 2024 Plan, for financial reporting purposes we will incur compensation expense that will be recognized over the vesting period of the options, SARs, stock units or restricted shares. We are not able at this time to predict whether such compensation expense will be material, on an on-going basis, as that will depend on, among other things, the number of shares for which options, SARs, stock units, or restricted shares are granted and the prices of our common stock in the future. Certain Federal Income Tax Information The following discussion is intended only as a brief summary of the federal income tax consequences to us and to U.S. Participants for awards granted under the Amended 2024 Plan. The federal tax laws may change and the federal, state and local tax consequences for any participant will depend upon his or her individual circumstances. This summary is not intended to be exhaustive and the rules summarized here are subject to change. We advise Participants to consult with a tax advisor regarding the tax implications of their awards under the Amended 2024 Plan. Nonqualified Stock Options . Upon the grant of a non-qualified stock option, the Participant will not recognize any taxable income and the Company will not be entitled to a deduction. Upon the exercise of a non-qualified stock option, the excess of the fair market value of the shares acquired on the exercise of the non-qualified stock option over the exercise price (the “spread”) will constitute compensation taxable to the Participant as ordinary income. We, in computing our U.S. federal income tax, will generally be entitled to a deduction in an amount equal to the compensation taxable to the Participant. If shares of common stock acquired upon exercise of a non-qualified stock option are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of such exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the Participant) depending upon the length of time such shares were held by the Participant. Incentive Stock Options . A Participant will not recognize taxable income on the grant or exercise of an ISO. However, the spread at exercise will constitute an item includible in alternative minimum taxable income, and, thereby, may subject the Participant to