Company: CLPR
Filing Date: 2025-04-30
Form Type: DEF 14A
Source: 0001437749-25-013840
Chunk: 37

Company: Clipper Realty Inc.
Filing Date: 2025-04-30
Form: DEF 14A
Chunk 37
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 reportable when an incentive stock option is granted (and we will not be entitled to any related deduction) or, if certain statutory employment and holding period conditions are satisfied, exercised. However, the amount by which the fair market value of common stock on the date the incentive stock option is exercised exceeds the exercise price of such option will be treated as income for purposes of computing the grantee’s alternative minimum taxable income in the year the incentive stock option is exercised. If the shares of common stock acquired through the exercise of an incentive stock option are held by the grantee through the later of (i) two years from the date of the grant of the option and (ii) one year after the transfer of such shares to the grantee pursuant to the exercise, the sale price minus the exercise price will be taxed as a capital gain or loss. If the grantee exercises the incentive stock option and sells the shares before the end of the applicable holding periods, the grantee generally will have ordinary income at the time of the sale equal to the fair market value of the shares on the exercise date minus the exercise price.

SARs. The grant of a SAR does not result in taxable income to the grantee or in a deduction by us. Upon exercise of a SAR, the grantee will generally recognize ordinary income in an amount equal to the cash or fair market value of the shares received upon exercise and the Company will generally be entitled to tax deduction for the amount taxable to the individual.

Restricted Shares. A grantee normally will not realize taxable income upon the grant of restricted shares unless, the grantee timely elects under Section 83(b) of the Code to be taxed at that time. Instead, the grantee will have ordinary income at the time of vesting equal to the fair market value of our shares on the vesting date and the Company will be entitled to a deduction in the same amount. Once the grantee realizes ordinary income with respect to the restricted shares, any subsequent increase in the value generally will be taxed when the shares are sold as long-term or short-term capital gain, depending on how long the restricted shares are held. The grantee’s holding period will begin on the date he or she realizes ordinary income.

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Restricted Stock Units/Performance Units. A grantee normally will not realize taxable income upon the grant of a restricted stock unit or performance unit. Rather, the grantee will realize ordinary income when restricted stock units or performance units are settled in an amount equal to the fair market