Common use of Material Tax Consequences Clause in Contracts

Material Tax Consequences. for Employees who are Tax Residents in the United Kingdom. The following is a general summary of the income tax and NIC consequences of the exchange of options pursuant to the offer for U.K. tax residents. This discussion is based on the U.K. tax law as of the date of the offer, which is subject to change, possibly on a retroactive basis. This summary does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders. The original options granted to you by E.pi▇▇▇▇▇ ▇▇▇e granted under a non-approved stock option plan. With a non-approved stock option, income tax liability arises on the exercise of the option based on the difference between the fair market value of the shares on the date of exercise and the exercise price. In addition, a liability to pay the employee's NICs arises on the gain realized at exercise, calculated effectively in the same manner as for income tax, if your earnings do not already exceed the maximum limit for NIC purposes. When you sell your shares, you may be subject to capital gains tax. The new option is intended to be granted partially under an Inland Revenue approved share scheme and partially under an unapproved share scheme but with a joint election in respect of the secondary NIC requirement. The tax implication for the new option will be significantly different from the original option. Inland Revenue Approved Share Scheme. A portion of the new option will be made under an Inland Revenue Approved Share Scheme, which provides for an option grant of shares with a market value of up to L30,000 (converted from U.S. dollars to sterling on the date of grant). Taxes typically due on the approved options at the time of exercise (i.e., the difference between the fair market value of the shares on the date of the exercise price) may be deferred until the time of sale (when capital gains treatment may apply.) To qualify for tax relief at the time of exercise, you must not exercise the option within three years of the grant date or within three years of the exercise of an option that benefited from preferred tax treatment. The exercise of the approved option must be made in accordance with the rules of the stock option plan and while the stock option plan retains formal Inland Revenue approval. If you choose to

Material Tax Consequences. for Employees who are Tax Residents in the United Kingdom. The following is a general summary of the income tax and NIC consequences of the exchange of options pursuant to the offer for U.K. tax residents. This discussion is based on the U.K. tax law as of the date of the offer, which is subject to change, possibly on a retroactive basis. This summary does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders. The original options granted to you by E.pi▇▇▇▇▇ ▇▇▇e granted under a non-approved stock option plan. With a non-approved stock option, income tax liability arises on the exercise of the option based on the difference between the fair market value of the shares on the date of exercise and the exercise price. In addition, a liability to pay the employee's NICs arises on the gain realized at exercise, calculated effectively in the same manner as for income tax, if your earnings do not already exceed the maximum limit for NIC purposes. When you sell your shares, you may be subject to capital gains tax. The new option is intended to be granted partially under an Inland Revenue approved share scheme and partially under an unapproved share scheme but with a joint election in respect of the secondary NIC requirement. The tax implication for the new option will be significantly different from the original option. Inland Revenue Approved Share Scheme. A portion of the new option will be made under an Inland Revenue Approved Share Scheme, which provides for an option grant of shares with a market value of up to L30,000 (converted from U.S. dollars to sterling on the date of grant). Taxes typically due on the approved options at the time of exercise (i.e., the difference between the fair market value of the shares on the date of exercise and the exercise price) may be deferred until the time of sale (when capital gains treatment may apply.) To qualify for tax relief at the time of exercise, you must not exercise the option within three years of the grant date or within three years of the exercise of an option that benefited from preferred tax treatment. The exercise of the approved option must be made in accordance with the rules of the stock option plan and while the stock option plan retains formal Inland Revenue approval. If you choose toyou