FEDERAL INCOME TAX CONSEQUENCES. The following is a general discussion of certain U.S. federal income tax consequences relating to awards granted under the 2006 Stock Incentive Plan. This discussion does not address all aspects of U.S. federal income taxation, does not discuss state, local and foreign tax issues and does not discuss considerations applicable to a holder who is, with respect to the United States, a non-resident alien individual. This summary of federal income tax consequences does not purport to be complete and is based upon interpretations of the existing laws, regulations and rulings which could be altered materially with enactment of any new tax legislation. Under the United States Internal Revenue Code (the “Code”), the Company will generally be entitled to a deduction for federal income tax purposes at the same time and in the same amount as the ordinary income that participants recognize pursuant to awards (subject to the participant’s overall compensation being reasonable, and to the discussion below with respect to Code section 162(m)). For participants, the expected U.S. tax consequences of awards are as follows: ISOs. ISOs may only be granted to employees and must be exercised while employed or within 3 months of the termination of employment (except in cases of death or disability). A participant will not recognize income upon the grant of an ISO. There are generally no tax consequences to the participant upon exercise of an ISO (except the amount by which the fair market value of the shares at the time of exercise exceeds the option exercise price is a tax preference item possibly giving rise to an alternative minimum tax). If the shares are not disposed of within two years from the date the ISO was granted or within one year after the ISO was exercised, any gain realized upon the subsequent disposition of the shares will be characterized as long-term capital gain and any loss will be characterized as long-term capital loss. If either of these holding period requirements are not met, then a “disqualifying disposition” occurs and (a) the participant recognizes ordinary income gain in the amount by which the fair market value of the shares at the time of exercise exceeded the exercise price for the ISO and (b) any remaining amount realized on disposition (except for certain “wash” sales, gifts or sales to related persons) will be characterized as capital gain or loss. If a participant pays the option exercise price of an ISO by the surrender of unrestricted share...
FEDERAL INCOME TAX CONSEQUENCES. For federal income tax purposes, it ------------------------------- is intended that the transfers described in Section 2.1, Section 2.2 and Section ----------- ----------- ------- 2.3 and the Merger qualify as a contribution to Xenon 2 qualifying under Section --- 351 of the Code.
FEDERAL INCOME TAX CONSEQUENCES. The Company has not been structured to provide tax benefits to investors, and an investment in the Company should not be based on the expectation that tax benefits will accrue therefrom.
FEDERAL INCOME TAX CONSEQUENCES. Caution. We are not responsible for the manner in which the Company will record the Tender Offer transaction for income tax accounting purposes. The tax consequences of tendering shares in this Offer will vary depending on the circumstances of each shareholder. Each shareholder should consult his, her or its own tax advisor as to the particular United States federal, and state, income tax consequences to that shareholder of tendering shares pursuant to the Offer and the applicability and effect of any state, local or foreign tax laws and recent changes in applicable tax laws.
FEDERAL INCOME TAX CONSEQUENCES. The current Federal income tax consequences with respect to the receipt of Restricted Stock are set forth in Exhibit "B" (attached to and made a part hereof).
FEDERAL INCOME TAX CONSEQUENCES. The parties intend that, for federal income tax purposes, the Merger shall constitute a reorganization within the meaning of Section 368 of the Code.
FEDERAL INCOME TAX CONSEQUENCES. For federal income tax purposes, it is intended that the transfers described in SECTION 2.1, SECTION 2.2 and SECTION 2.3 and the Merger qualify as a contribution to Xenon 2 qualifying under Section 351 of the Code.
FEDERAL INCOME TAX CONSEQUENCES. In connection with making the representations and warranties set forth in this paragraph, the Selling Agent has not relied on inquiries made by or on behalf of any other parties.
FEDERAL INCOME TAX CONSEQUENCES. Certain federal income tax consequences to you in connection with your purchase of the Shares are determined in accordance with Section 83. SECTION 83(A). Under Section 83(a), a person to whom property is transferred in connection with the performance of services ("SECTION 83 PROPERTY") must recognize ordinary income in the year the property is transferred in an amount equal to the fair market value of the Section 83 property at the time it is transferred less the amount, if any, paid for the Section 83 property, unless the Section 83 property is not transferable and is subject to a substantial risk of forfeiture (collectively, a "RISK OF FORFEITURE"). If there is a Risk of Forfeiture, then the person acquiring Section 83 property will not recognize income until the Risk of Forfeiture lapses (unless a Section 83(b) election is made - see below), at which time the person must recognize as ordinary income the fair market value of the Section 83 property at that time less the amount, if any, paid for the Section 83 property. Your purchase of the Shares constitutes a transfer of Section 83 property. Further, the Stock Purchase Agreement provides that, if you cease to be employed by the Company for any reason, the Company must repurchase from you and you must sell to the Company all Non-Vested Shares (as defined in the Stock Purchase Agreement) for an amount which may be less than their fair market value. Under Regulations promulgated under Section 83, these provisions constitute a Risk of Forfeiture over your Non-Vested Shares. Thus, under Section 83(a), you would not be required to recognize any income as a result of your purchase of the Shares until they vest; when they vest, you would be required under Section 83(a) to recognize as ordinary income the excess, if any, of the fair market value of the Shares (as of the day they vest) over the price you paid for those Shares under the Stock Purchase Agreement (for this purpose, the value of any prior services that were consideration for the purchase of Shares will be valued at zero). If the price of the Company's Common Stock is greater when the Shares vest than when you purchased them, you could have a substantial tax liability in connection with your purchase of the Shares when they vest. SECTION 83(B) ELECTION. Section 83(b) provides an alternative method for taxing Section 83 property. Under Section 83(b), a person may elect to recognize ordinary income in the year Section 83 property is transferred to him ...
FEDERAL INCOME TAX CONSEQUENCES. The federal income tax consequences of any of the transactions contemplated by this Agreement and the Plan of Consolidation shall be satisfactory to the Company, in its sole discretion.
