Tax Consequences Clause Example from Business Contracts

Tax Consequences. You agree to review with your own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. You will rely solely on your advisors and not on any statements or representations of the Company or any of its agents. You understand that you (and not the Company) will be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this 6. Agreement. You understa...nd that Section 83 of the Code taxes as ordinary income to you the fair market value of the Shares of Common Stock issued to you under this Agreement as of the date any restrictions on the Shares lapse (that is, as of the date on which part or all of the Shares vest). In this context, "restriction" includes the risk of forfeiture with respect to some or all of the Shares set forth above. You understand that you may elect to be taxed at the time the Common Stock is issued to you pursuant to this Agreement, rather than when and as the risk of forfeiture with respect to the Shares expires, by filing an election under Section 83(b) of the Code (an "83(b) Election") with the Internal Revenue Service within 30 days after the date you acquire Shares of Common Stock pursuant to this Agreement. A sample 83(b) Election is attached as Attachment V for convenience. Even if the fair market value of the Common Stock at the time it is issued equals the amount paid for the Common Stock, the 83(b) Election must be made to avoid income under Section 83(a) in the future. You understand that failure to file an 83(b) Election in a timely manner may result in adverse tax consequences for you. You further understand that you must file an additional copy of the 83(b) Election with your federal income tax return for the calendar year in which you make the 83(b) Election. You acknowledge that the foregoing is only a summary of the effect of U.S. federal income taxation with respect to issuance of the Common Stock pursuant to this Agreement, and does not purport to be complete. You further acknowledge that notwithstanding the inclusion of a sample 83(b) Election as Attachment V, the Company has directed you to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which you may reside, and the tax consequences of your death. You assume all responsibility for filing an 83(b) Election and paying all taxes resulting from the 83(b) Election or the lapse of the restrictions on the Common Stock. YOU ACKNOWLEDGE THAT NOTWITHSTANDING THE INCLUSION OF A SAMPLE 83(B) ELECTION AS ATTACHMENT V, IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY 83(B) ELECTION. THE COMPANY AND ITS LEGAL COUNSEL CANNOT ASSUME RESPONSIBILITY FOR FAILURE TO FILE THE 83(B) ELECTION IN A TIMELY MANNER UNDER ANY CIRCUMSTANCES. View More