Common use of Early Disposition Clause in Contracts

Early Disposition. If the Employee disposes of any share or shares acquired by the Employee within two years from the date of this Agreement or within one year following the transfer of such share or shares to the Employee by the Company, whichever is later, the Employee shall not be qualified for favorable tax treatment under the Internal Revenue Code and must include in his taxable income for the year of such disposition the difference between the fair market value of the share or shares disposed of at the time of this acquisition under this Agreement and the exercise price paid for such share or shares by the Employee at said time of acquisition. If the Employee makes an early disposition of any such share or shares in violation of the preceding sentence, the Employee shall promptly pay to the Company the amount of any federal, state, or local taxes, if any, which are required to be withheld or otherwise paid by the Employee with regard to such early disposition.