Tax Consequences Clause Example with 40 Variations from Business Contracts
This page contains Tax Consequences clauses in business contracts and legal agreements. An example clause is provided at the top of the page, followed by clauses with minor variations. You can view the text differences by selecting the "Show Differences" option.
Tax Consequences. Set forth below is a brief summary, as of the Date of Grant, of some of the federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Incentive Stock Option. If the Option qualifies as an Incentive Stock Option, there will be no regular federal income tax liability... upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal income tax purposes and may subject the Optionee to an alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Stock Option. If the Option does not qualify as an Incentive Stock Option, there may be a regular federal income tax liability upon the exercise of the Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Optionee is an Employee or former Employee, the Company will be required to withhold from the Optionee's compensation or collect from the Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) Disposition of Shares. In the case of a Non-Qualified Stock Option, if the Shares are held for at least one year before disposition, any gain on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal income tax purposes. If the Shares acquired pursuant to an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), gain on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, the difference between the amount realized on the sale of such Shares and the Exercise Price. Any gain in excess of the Spread shall be treated as capital gain.View More
Variations of a "Tax Consequences" Clause from Business Contracts
Tax Consequences. Set forth below is a brief summary, as of the Date of Grant, of some of the federal tax consequences of exercise of the Option and disposition of the Shares. (a) Tax Advice. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF EXERCISE OF THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING DISPOSITION OF THE SHARES EXERCISED. OPTIONEE RE...PRESENTS THAT OPTIONEE HAS CONSULTED WITH OR WILL CONSULT WITH ANY TAX CONSULTANT(S) OPTIONEE DEEMS ADVISABLE PRIOR TO THE EXERCISE OF THIS OPTION OR DISPOSITION OF THE EXERCISED SHARES. (a) Exercise OPTIONEE CONFIRMS THAT IT IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. (b) Notice of Disqualifying Disposition of Incentive Stock Option. Option Shares. If the Option qualifies as granted to Optionee herein is an Incentive Stock Option, there will be no regular federal income tax liability upon the exercise and if Optionee sells or otherwise disposes of the Option, although the excess, if any, of the Fair Market Value any of the Shares acquired pursuant to the Incentive Stock Option on or before the later of (i) the date of exercise over the Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal income tax purposes and may subject the Optionee to an alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Stock Option. If the Option does not qualify as an Incentive Stock Option, there may be a regular federal income tax liability upon the exercise of the Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Optionee is an Employee or former Employee, the Company will be required to withhold from the Optionee's compensation or collect from the Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) Disposition of Shares. In the case of a Non-Qualified Stock Option, if the Shares are held for at least one year before disposition, any gain on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two (2) years after the Date of Grant, any gain on disposition on or (ii) the Shares will be treated as long-term 5 capital gain for federal income tax purposes. If the Shares acquired pursuant to an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), gain on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on date one (1) year after the date of exercise over exercise, Optionee shall immediately notify the Exercise Price (the "Spread"), or, if less, Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the difference between the amount realized Company on the sale of such Shares and compensation income recognized by Optionee from the Exercise Price. Any gain early disposition by payment in excess cash or out of the Spread shall be treated as capital gain. current earnings paid to Optionee. View More
Tax Consequences. Set forth below is a brief summary, summary as of the Effective Date of Grant, the Plan of some of the federal and California tax consequences of grant and exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE PARTICIPANT SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (a) Exercise 12.1 Grant of Incentive Stock Option. If Grant of the Option q...ualifies as an Incentive Stock Option, there will is generally not a taxable event. However, options granted at a discount from fair market value may be no regular federal income considered "deferred compensation" subject to adverse tax liability upon the exercise consequences under Section 409A of the Option, although Internal Revenue Code of 1986. The Company has made a good faith determination that the excess, if any, Exercise Price of the Fair Market Value Option is not less than the fair market value of the Shares underlying the Option as of the Date of Grant. It is possible, however, that the Internal Revenue Service could challenge this determination and assert that the fair market value of the Shares underlying the Option was greater on the date Date of exercise over Grant than the Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal determined by the Company, which could result in immediate income tax purposes upon the vesting of the Option (whether or not exercised) and may subject the Optionee to an alternative minimum a 20% tax penalty. The Company gives no assurance that such adverse tax consequences will not occur and specifically assumes no responsibility therefor. By accepting this Option, Participant acknowledges that any tax liability in or other adverse tax consequences to Participant resulting from the year grant of exercise. (b) the Option shall be the responsibility of, and shall be entirely borne by, Participant. 12.2 Exercise of Non-Qualified Stock Option. If the Option does not qualify as an Incentive Stock Option, there There may be a regular federal and California income tax liability upon the exercise of the Option. The Optionee Participant will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value fair market value of the Vested Shares on the date of exercise over the Exercise Price. If the Optionee Participant is an Employee a current or former Employee, 17 employee of the Company, the Company will may be required to withhold from the Optionee's Participant's compensation or collect from the Optionee Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) To the extent that the Shares were exercised prior to vesting coincident with the filing of a Section 83(b) election, the amount taxed will be based upon the excess, if any, of the fair market value of the Unvested Shares on the date of exercise over the Exercise Price. 12.3 Disposition of Shares. In The following tax consequences may apply upon disposition of the case of a Non-Qualified Stock Option, if Shares. (a) Capital Gain. If the Shares are held for at least one year before disposition, more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of the Option, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In gain. (b) Withholding. The Company may be required to withhold from the case of an Incentive Stock Option, if Shares are held for at least one year after Participant's compensation or collect from the date of exercise Participant and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal income tax purposes. If the Shares acquired pursuant to an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), gain on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) pay to the extent applicable taxing authorities an amount equal to a percentage of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, the difference between the amount realized on the sale of such Shares and the Exercise Price. Any gain in excess of the Spread shall be treated as capital gain. this compensation income. View More
Tax Consequences. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR DISPOSITION OF THE SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. Set forth below is a brief summary, as of the Date of Grant, date the Plan was adopted by the Board, of some of the fed...eral U.S. Federal and California tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE PURCHASER SHOULD CONSULT A HIS OR HER OWN TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) IN ADDITION, THIS SUMMARY DOES NOT ADDRESS THE TAX CONSEQUENCES OF THE EXERCISE OF THE OPTION IF THE PURCHASER IS SUBJECT TO TAX IN A DIFFERENT STATE OR IN A DIFFERENT COUNTRY OR COUNTRIES OUTSIDE OF THE UNITED STATES, AND ANY SUCH PURCHASER SHOULD CONSULT HIS OR HER PERSONAL TAX ADVISOR BEFORE EXERCISING THE OPTION. 12.1 Exercise of Incentive Stock Option. If the Option qualifies as an Incentive Stock Option, ISO, there will be no regular federal U.S. Federal income tax liability or California income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to a tax preference item for U.S. Federal alternative minimum taxable income for federal income tax purposes and may subject Purchaser to the Optionee to an alternative minimum tax liability in the year of exercise. (b) 12.2 Exercise of Non-Qualified Nonqualified Stock Option. If the Option does not qualify as an Incentive Stock Option, ISO, there may be a regular federal U.S. Federal income tax liability and a California income tax liability upon the exercise of the Option. The Optionee Purchaser will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Purchaser is or was an employee of the Optionee is an Employee or former Employee, Company, the Company will may be required to withhold from the Optionee's Purchaser's compensation or collect from the Optionee Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) 8 12.3 Disposition of Shares. In The following tax consequences may apply upon disposition of the case of a Non-Qualified Shares. (a) Incentive Stock Option, if Options. If the Shares are held for at least one year before disposition, more than twelve (12) months after the date of the transfer of the Shares pursuant to the exercise of an ISO and are disposed of more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares will be treated as long-term long term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise U.S. Federal and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal California income tax purposes. If the Shares acquired pursuant to purchased under an Incentive Stock Option ISO are disposed of within such one-year the applicable one (1) year or two-year periods (a "disqualifying disposition"), two (2) year period, any gain realized on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, Price. (b) Nonqualified Stock Options. If the difference between Shares are held for more than twelve (12) months after the amount date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on the sale of such Shares and the Exercise Price. Any gain in excess disposition of the Spread shall Shares will be treated as long term capital gain. (c) Withholding. The Company may be required to withhold from the Purchaser's compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income. View More
Tax Consequences. Set forth below is a brief summary, summary as of the Effective Date of Grant, the Plan of some of the federal and state tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Incentive Stock Nonstatutory Option. If the Option qualifies as an Incentive Stock... Option, there will There may be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal income tax purposes and may subject the Optionee to an alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Stock Option. If the Option does not qualify as an Incentive Stock Option, there may be a regular federal state income tax liability upon the exercise of the Option. The Optionee Participant will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Optionee Participant is an Employee a current or former Employee, employee of the Company, the Company will may be required to withhold from the Optionee's Participant's compensation or collect from the Optionee Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) (b) Disposition of Shares. In the case of a Non-Qualified Stock Option, if Shares from Nonstatutory Options. If the Shares are held for at least one year before disposition, twelve (12) months or less following the date of the transfer of the Shares pursuant to the exercise of an Option, any gain realized on disposition of the Shares will be treated as short-term capital gain. If the Shares are held for more than twelve (12) months after the date of the transfer of the Shares pursuant to the exercise of an Option, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal income tax purposes. If the Shares acquired pursuant to an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), gain on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, the difference between the amount realized on the sale of such Shares and the Exercise Price. Any gain in excess of the Spread shall be treated as capital gain. View More
Tax Consequences. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR DISPOSITION OF THE SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. Set forth below is a brief summary, summary as of the Date of Grant, date the Plan was adopted by the Board of some of ...the federal U.S. Federal and California tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE PURCHASER SHOULD CONSULT A HIS OR HER OWN TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) 12.1 Exercise of Incentive Stock Option. If the Option qualifies as an Incentive Stock Option, ISO, there will be no regular federal U.S. Federal income tax liability or California income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to a tax preference item for U.S. Federal alternative minimum taxable income for federal income tax purposes and may subject Purchaser to the Optionee to an alternative minimum tax liability in the year of exercise. (b) 12.2 Exercise of Non-Qualified Nonqualified Stock Option. If the Option does not qualify as an Incentive Stock Option, ISO, there may be a regular federal U.S. Federal income tax liability and a California income tax liability upon the exercise of the Option. The Optionee Purchaser will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Purchaser is or was an employee of the Optionee is an Employee or former Employee, Company, the Company will may be required to withhold from the Optionee's Purchaser's compensation or collect from the Optionee Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) 12.3 Disposition of Shares. In The following tax consequences may apply upon disposition of the case of a Non-Qualified Shares. (a) Incentive Stock Option, if Options. If the Shares are held for at least one year before disposition, more than twelve (12) months after the date of the transfer of the Shares pursuant to the exercise of an ISO and are disposed of more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares will be treated as long-term long term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal California income tax purposes. If the Shares acquired pursuant to purchased under an Incentive Stock Option ISO are disposed of within such one-year the applicable one (1) year or two-year periods (a "disqualifying disposition"), two (2) year period, any gain realized on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, Price. (b) Nonqualified Stock Options. If the difference between Shares are held for more than twelve (12) months after the amount date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on the sale of such Shares and the Exercise Price. Any gain in excess disposition of the Spread shall Shares will be treated as long term capital gain. (c) Withholding. The Company may be required to withhold from the Purchaser's compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income. View More
Tax Consequences. Set forth below is a brief summary, summary as of the Date date of Grant, grant of some of the certain United States federal tax consequences of exercise of the this Option and disposition of the Shares. Shares under the laws in effect as of the date of grant. THIS SUMMARY DOES NOT ADDRESS SPECIFIC STATE, LOCAL OR FOREIGN TAX CONSEQUENCES THAT MAY BE APPLICABLE TO OPTIONEE. OPTIONEE IS RESPONSIBLE FOR CONSULTING A TAX ADVISER AS TO THE APPLICABLE TAX LAWS OF THE JURISDICTION(S) IN WHICH OPTIONEE... RESIDES OR -2- MAY BE SUBJECT TO TAX BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE THAT TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (a) 6.1 Exercise of Incentive Nonqualified Stock Option. If the Option qualifies as an Incentive Stock Option, there will be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal income tax purposes and may subject the Optionee to an alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Stock Option. If the Option does not qualify as an Incentive Stock Option, there There may be a regular federal income tax liability upon the exercise of the Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Optionee is an Employee employee or former Employee, employee of the Company, the Company will be required to withhold from the Optionee's compensation or collect from the Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) 6.2 Disposition of Shares. In the case of a Non-Qualified Stock Option, if If the Shares are held for at least one year before disposition, more than twelve (12) months after the date of exercise, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal income tax purposes. If the Shares acquired pursuant to an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), gain on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, the difference between the amount realized on the sale of such Shares and the Exercise Price. Any gain in excess of the Spread shall be treated as capital gain.View More
Tax Consequences. Set forth below is a brief summary, as of the Date of Grant, of some of the federal tax consequences of exercise of the Option and disposition of the Shares. PURCHASER UNDERSTANDS AND REPRESENTS: (i) THAT PURCHASER HAS REVIEWED THE PROSPECTUS PREPARED FOR THE PLAN AND CONSULTED PURCHASER'S PERSONAL TAX ADVISER IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. SET FORTH BELOW IS A BRIEF SUMMARY AS OF THE DATE THE... PLAN WAS ADOPTED BY THE BOARD OF SOME OF THE U.S. FEDERAL TAX CONSEQUENCES OF EXERCISE OF THE OPTION AND DISPOSITION OF THE SHARES. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE PURCHASER SHOULD CONSULT A THE PROSPECTUS AND PURCHASER'S PERSONAL TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) 8.1 Exercise of Incentive Stock Option. If the Option qualifies as an Incentive Stock Option, ISO, there will be no regular federal U.S. Federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to a tax preference item for U.S. Federal alternative minimum taxable income for federal income tax purposes and may subject Purchaser to the Optionee to an alternative minimum tax liability in the year of exercise. (b) 8.2 Exercise of Non-Qualified Nonqualified Stock Option. If the Option does not qualify as an Incentive Stock Option, ISO, there may be a regular federal U.S. Federal income tax liability upon the exercise of the Option. The Optionee Purchaser will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Purchaser is or was an employee of the Optionee is an Employee or former Employee, Company, the Company will may be required to withhold from the Optionee's Purchaser's compensation or collect from the Optionee Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) 8.3 Disposition of Shares. In The following tax consequences may apply upon disposition of the case of a Non-Qualified Shares. (a) Incentive Stock Option, if Options. If the Shares are held for at least one year before disposition, more than twelve (12) months after the date of the transfer of the Shares pursuant to the exercise of an ISO and are disposed of more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 long term capital gain for federal income tax purposes. If the Shares acquired pursuant to purchased under an Incentive Stock Option ISO are disposed of within such one-year the applicable one (1) year or two-year periods (a "disqualifying disposition"), two (2) year period, any gain realized on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, Price. (b) Nonqualified Stock Options. If the difference between Shares are held for more than twelve (12) months after the amount date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on the sale of such Shares and the Exercise Price. Any gain in excess disposition of the Spread shall Shares will be treated as long-term capital gain. (c) Withholding. The Company may be required to withhold from the Purchaser's compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income. View More
Tax Consequences. Set forth below is a brief summary, summary as of the Effective Date of Grant, the Plan of some of the U.S. federal and applicable state tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE PARTICIPANT SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (a) 7 10.1 Exercise of Incentive Stock Option. ISO. If the Option qualifie...s as an Incentive Stock Option, ISO, there will be no regular U.S. federal or applicable state income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to a tax preference item for federal alternative minimum taxable income for federal income tax purposes and may subject the Optionee Participant to an the alternative minimum tax liability in the year of exercise. (b) 10.2 Exercise of Non-Qualified Nonqualified Stock Option. If the Option does not qualify as an Incentive Stock Option, ISO, there may be a regular U.S. federal and applicable state income tax liability upon the exercise of the Option. The Optionee Participant will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Optionee Participant is an Employee a current or former Employee, employee of the Company, the Company will may be required to withhold from the Optionee's Participant's compensation or collect from the Optionee Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) 10.3 Disposition of Shares. In The following tax consequences may apply upon disposition of the case of a Non-Qualified Shares. (a) Incentive Stock Option, if Options. If the Shares are held for at least one year before disposition, more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed of more than two (2) years after the Date of Grant set forth in the Grant Notice, any gain realized on disposition of the Shares will be treated as long-term long term capital gain for U.S. federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal applicable state income tax purposes. If the Shares acquired pursuant to purchased under an Incentive Stock Option ISO are disposed of within such one-year either of the applicable one (1) year or two-year periods (a "disqualifying disposition"), two (2) year holding periods, any gain realized on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) rates in the year of the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, Price. (b) Nonqualified Stock Options. If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long-term capital gain. (c) Withholding. The Company may be required to withhold from the Participant's compensation or collect from the Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income. 10.4 Section 83(b) Election for Unvested Shares Purchased by Early Exercise. With respect to Unvested Shares which are subject to the Repurchase Option, unless an election is filed by the Participant with the Internal Revenue Service (and, if less, necessary, the proper state taxing authorities), within 30 days of the purchase of the 8 Unvested Shares, electing pursuant to Section 83(b) of the Code (and similar state tax provisions, if applicable) to be taxed currently on any difference between the amount realized Exercise Price of the Unvested Shares and their Fair Market Value on the sale date of such purchase, there may be a recognition of taxable income (including, where applicable, alternative minimum taxable income) to the Participant, measured by the excess, if any, of the Fair Market Value of the Unvested Shares and at the time they cease to be Unvested Shares, over the Exercise Price. Any gain in excess Price of the Spread shall be treated as capital gain. Unvested Shares. View More
Tax Consequences. Set forth below is a brief summary, summary as of the Effective Date of Grant, the Plan of some of the federal tax consequences of exercise of the this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE PARTICIPANT SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (a) 5.1 Exercise of Incentive Stock Option. ISO. If the this Option qualifies as an Incentive S...tock Option, ISO, there will be no regular federal or state income tax liability upon the exercise of the this Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to alternative minimum taxable income a tax preference item for federal income tax purposes and may subject the Optionee Participant to an the alternative minimum tax liability in the year of exercise. (b) 5.2 Exercise of Non-Qualified Nonqualified Stock Option. If the this Option does not qualify as an Incentive Stock Option, ISO, there may be a regular federal and state income tax liability upon the exercise of the this Option. The Optionee Participant will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Participant is or was an employee of the Optionee is an Employee or former Employee, Company, the Company will be required to withhold from the Optionee's Participant's compensation or collect from the Optionee Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) Disposition of Shares. In the case of a Non-Qualified Stock Option, if the Shares are held for at least one year before disposition, any gain on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal income tax purposes. If the Shares acquired pursuant to an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), gain on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, the difference between the amount realized on the sale of such Shares and the Exercise Price. Any gain in excess of the Spread shall be treated as capital gain.View More
Tax Consequences. Set forth below is a brief summary, as of the Date of Grant, summary of some of the federal and California tax consequences of exercise of the this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (a) 7.1 Exercise of Incentive Nonqualified Stock Option. If the Option qualifies as an Incentive Stock Option, there wi...ll There may be no a regular federal and California income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal income tax purposes and may subject the Optionee to an alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Stock this Option. If the Option does not qualify as an Incentive Stock Option, there may be a regular federal income tax liability upon the exercise of the Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value fair market value of the Shares on the date of exercise over the Exercise Price. If the Optionee is an Employee or former Employee, the The Company will be required to withhold from the Optionee's compensation or collect from the Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. (c) 7.2 Disposition of Shares. In the case of a Non-Qualified Stock Option, if If the Shares are held for at least one year before disposition, more than twelve (12) months after the date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. In gain, as the case of an Incentive Stock Option, if Shares are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain on disposition on the Shares will be treated as long-term 5 capital gain for federal income tax purposes. If the Shares acquired pursuant to an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), gain on such disqualifying disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price (the "Spread"), or, if less, the difference between the amount realized on the sale of such Shares and the Exercise Price. Any gain in excess of the Spread shall be treated as capital gain. may be. View More
