Tax Consequences Clause Example from Business Contracts
This example Tax Consequences clause appears in
4 contracts
from
1 company
Tax Consequences. Set forth below is a brief summary as of the Effective Date of the Plan of some of the tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 5.1 Exercise of ISO. If this Option qualifies as an ISO, there will be no regular federal or state income tax liability upon the exercise of thi...s 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 a tax preference item for federal income tax purposes and may subject the Participant to the alternative minimum tax in the year of exercise. 5.2 Exercise of Nonqualified Stock Option. If this Option does not qualify as an ISO, there may be a regular federal and state income tax liability upon the exercise of this Option. 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 Company, the Company will be required to withhold from Participant's compensation or collect from Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.View More
