Question 1

Does a tender offer trigger a new 409A?

Accepted Answer

It can. A material secondary transaction in your common stock is evidence of fair market value, and if it is out of line with the current valuation it is a material event.

Question 2

How is participating preferred handled?

Accepted Answer

As additional breakpoints in the allocation. The preference is taken first and the residual is shared, so the common stock only participates fully above the participation cap where one exists.

Question 3

We changed our forecast materially. Do we need a revaluation?

Accepted Answer

If the revision would change what a buyer would pay, yes. That is the test, not the size of the spreadsheet edit.