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, summary as of the date of this Option of certain of the federal and California tax consequences of exercise of this Option and disposition of the Shares under the laws in effect as of the Date of Grant, of some of the federal tax consequences of exercise of the Option and disposition of the Shares. Grant. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXER...CISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Incentive Stock Option. If the this Option qualifies as an Incentive Stock Option, there will be no regular federal 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 the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Nonstatutory Stock Option. If the this Option does not qualify as an Incentive Stock Option, there may be a regular federal income tax liability and a California 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, 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 Nonstatutory Stock Option, if the Shares are held for at least one year before disposition, year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal and California income tax purposes. In the case of an Incentive Stock Option, if Shares transferred pursuant to the Option are held for at least one year after the date of exercise and are disposed of at least two years after the Date of Grant, any gain realized on disposition on of the Shares will also be treated as long-term 5 capital gain for federal and California income tax purposes. If In either case, the long-term 4 capital gain will be taxed for federal income tax and alternative minimum tax purposes at a maximum rate of 28% if the Shares acquired pursuant to are held more than one year but less than 18 months after exercise and at 20% if the Shares are held more than 18 months after exercise. If Shares purchased under an Incentive Stock Option are disposed of within such one-year one year after exercise or two-year periods (a "disqualifying disposition"), within two years after the Date of Grant, 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, difference between the Exercise Price and the lesser of (i) the Fair Market Value of the Shares on the date of exercise over exercise, or (ii) the Exercise Price (the "Spread"), or, sale price of the Shares. (d) Notice of Disqualifying Disposition of Incentive Stock Option Shares. If the Option granted to Optionee herein is an Incentive Stock Option, and if less, Optionee sells or otherwise disposes of any of the difference between Shares acquired pursuant to the amount realized Incentive Stock Option on or before the later of (i) the date two years after the Date of Grant, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the 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 Below is a brief summary, summary as of the Date date of Grant, this Option of some certain of the 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 IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Incentive Stock O...ption. (i) Tax Treatment upon Exercise and Sale of Shares. If the this 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 fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the fair market value of the Shares on the date of exercise, or (ii) the sale price of the Shares. (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or before the later of (i) the date two years after the Option grant date, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee. Flxt Exh 10 4 Form of option grant.docx -7- (b) Exercise of Non-Qualified Nonstatutory Stock Option. If the this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) 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 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 If Shares issued upon exercise of a Non-Qualified Nonstatutory Stock Option, if the Shares Option are held for at least one year before disposition, year, 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, summary as of the Date date of Grant, this Option 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 SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Incentive Stock Option. ISO. If the this Option qualifies as an Incentive Stock Option,...ISO, 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 the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Nonstatutory 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 a Nonstatutory Stock 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 a 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 in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. (c) Disposition of Shares. In the case of a Non-Qualified Stock Option, an NSO, if the Shares are held for at least one year before disposition, year, 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, ISO, if Shares transferred pursuant to the Option are held for at least one year after the date of exercise and at least two years after the Date of Grant, any gain realized on disposition on of the Shares will also be treated as long-term 5 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 one year after exercise or two-year periods (a "disqualifying disposition"), two years after the Date of Grant, 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, difference between the Exercise Price and the lesser of (1) the Fair Market Value of the Shares on the date of exercise over exercise, or (2) the Exercise Price (the "Spread"), or, if less, sale price of the difference between the amount realized Shares. Any additional gain will be taxed as capital gain, short-term or long-term depending on the sale period that the ISO Shares were held. 4 (d) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the Date of Grant, or (2) the date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of such Shares and disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Exercise Price. Any gain in excess of Company on the Spread shall be treated as capital gain. compensation income recognized by the Optionee. View More
Tax Consequences. Set forth below is a brief summary, summary as of the Date date of Grant, this Option 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 SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Incentive Stock Option. ISO. If the this Option qualifies as an Incentive Stock Option,...ISO, 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 the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. (b) Exercise of Non-Qualified Nonstatutory 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 a Nonstatutory Stock 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 a 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 in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. (c) Disposition of Shares. In the case of a Non-Qualified Stock Option, an NSO, if the Shares are held for at least one year before disposition, year, 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, ISO, if Shares transferred pursuant to the Option are held for at least one year after the date of exercise and of at least two years after the Date of Grant, any gain realized on disposition on of the Shares will also be treated as long-term 5 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 one year after exercise or two-year periods (a "disqualifying disposition"), two years after the Date of Grant, 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, difference between the Exercise Price and the lesser of (1) the Fair Market Value of the Shares on the date of exercise over exercise, or (2) the Exercise Price (the "Spread"), or, if less, sale price of the difference between the amount realized Shares. Any additional gain will be taxed as capital gain, short-term or long-term depending on the sale period that the ISO Shares were held. (d) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the Date of Grant, or (2) the date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of such Shares and disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Exercise Price. Any gain in excess of Company on the Spread shall be treated as capital gain. compensation income recognized by the Optionee. View More
Tax Consequences. Set forth below Below is a brief summary, summary as of the Date date of Grant, this Option of some certain of the 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 IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. -3- (a) Exercise of Incentive Sto...ck Option. (i) Tax Treatment upon Exercise and Sale of Shares. If the this 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 fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the fair market value of the Shares on the date of exercise, or (ii) the sale price of the Shares. (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon exercise of an Incentive Stock Option, if «Optionee» sells or otherwise disposes of such Shares on or before the later of (i) the date two years after the Option grant date, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee. (b) Exercise of Non-Qualified Nonstatutory Stock Option. If the this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) 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 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 If Shares issued upon exercise of a Non-Qualified Nonstatutory Stock Option, if the Shares Option are held for at least one year before disposition, year, 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 Below is a brief summary, summary as of the Date date of Grant, this Option of some certain of the 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 IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Inc...entive Stock Option. (i) Tax Treatment upon Exercise and Sale of Shares. If the this 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 fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the fair market value of the Shares on the date of exercise, or (ii) the sale price of the Shares. (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or before the later of (i) the date two years after the Option grant date, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee. -4- (b) Exercise of Non-Qualified Nonstatutory Stock Option. If the this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) 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 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 If Shares issued upon exercise of a Non-Qualified Nonstatutory Stock Option, if the Shares Option are held for at least one year before disposition, year, 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 Below is a brief summary, summary as of the Date date of Grant, this Option of some certain of the 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 IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. -2- (a) Exercise of Incentive Sto...ck Option. (i) Tax Treatment upon Exercise and Sale of Shares. If the this 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 fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the fair market value of the Shares on the date of exercise, or (ii) the sale price of the Shares. (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or before the later of (i) the date two years after the Option grant date, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee. (b) Exercise of Non-Qualified Nonstatutory Stock Option. If the this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) 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 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 If Shares issued upon exercise of a Non-Qualified Nonstatutory Stock Option, if the Shares Option are held for at least one year before disposition, year, 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 Below is a brief summary, summary as of the Date date of Grant, this Option of some certain of the 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 IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. 3 (a) Exercise of Incentive Stock... Option. (i) Tax Treatment upon Exercise and Sale of Shares. If the this 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 fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the fair market value of the Shares on the date of exercise, or (ii) the sale price of the Shares. (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or before the later of (i) the date two years after the Option grant date, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee. (b) Exercise of Non-Qualified Nonstatutory Stock Option. If the this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) 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 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 If Shares issued upon exercise of a Non-Qualified Nonstatutory Stock Option, if the Shares Option are held for at least one year before disposition, year, 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 Below is a brief summary, summary as of the Date date of Grant, this Option of some certain of the 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 IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) Exercise of Incentive Stock O...ption. (i) Tax Treatment upon Exercise and Sale of Shares. If the this 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 fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the Fair Market Value of the Shares on the date of exercise, or (ii) the sale price of the Shares. -9- (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or before the later of (i) the date two (2) years after the Option grant date, or (ii) the date one (1) year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee. (b) Exercise of Non-Qualified Nonqualified Stock Option. If the this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) 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 If Shares issued upon exercise of a Non-Qualified Nonqualified Stock Option, if the Shares Option are held for at least one year before disposition, year, 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, summary as of the Date date of Grant, this Option Agreement of some of the federal and State 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 ADVISER BEFORE EXERCISING THE THIS OPTION OR DISPOSING OF THE SHARES. (a) 11.1 Exercise of Incentive Stock Option. If the this Option qualifies as an Ince...ntive Stock Option, there will be no regular federal income tax liability or 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 the alternative minimum taxable income tax for federal income tax purposes and may subject the Optionee to an the alternative minimum tax liability in the year of exercise. (b) 11.2 Exercise of Incentive Stock Option Following Disability. If the Optionee's Continuous Status as an Employee (as applicable) terminates as a result of disability that is not total and permanent disability as defined in Section 22(e)(3) of the Code, to the extent permitted on the date of termination, the Optionee must exercise an Incentive Stock Option within 90 days of such termination for the Incentive Stock Option to be qualified as an Incentive Stock Option. 5 11.3 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 and State income tax liability upon the exercise of the a Non-Qualified Stock 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 a 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 in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. (c) 11.4 Disposition of Shares. In the case of a Non-Qualified Stock Option, if the Shares are held for at least one year before disposition, year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal and State income tax purposes. In the case of an Incentive Stock Option, if Shares transferred pursuant to the Option are held for at least one year after receipt of the date Shares and are disposed of exercise and at least two years after the Date of Grant, any gain realized on disposition on of the Shares also will be treated as long-term 5 capital gain for federal and State income tax purposes. If the Shares acquired pursuant to purchased under an Incentive Stock Option are disposed of within such one-year or two-year periods (a "disqualifying disposition"), periods, 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, difference between the Exercise Price and the lesser of (i) 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 exercise, or (ii) the sale of such Shares and the Exercise Price. Any gain in excess price of the Spread shall be treated as capital gain. Shares. View More
