In an era marked by economic unpredictability, many private companies have considered an option repricing to retain key employees and realign their compensation strategies. Options are generally repriced via a board consent, which reduces the exercise price of the underwater stock options to the current fair market value.

While this process seems simple enough, the intricacies of option repricings demand a comprehensive understanding of the associated structural, administrative, corporate governance, accounting and tax implications. This article provides a high-level review of the major considerations for advising clients undergoing a repricing, offering insights and strategies for legal professionals navigating this complex landscape.